0001598981
false
0001598981
2023-09-18
2023-09-18
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): September 18, 2023
SKYX
PLATFORMS CORP.
(Exact
name of Registrant as Specified in its Charter)
Florida |
|
001-41276 |
|
46-3645414 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
2855
W. McNab Road
Pompano
Beach, Florida 33069
(Address
of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (855) 759-7584
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, no par value per share |
|
SKYX |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 |
Entry
into a Material Definitive Agreement |
On
September 18, 2023, Belami, Inc. (“Belami”), a wholly-owned subsidiary of SKYX Platforms Corp. (the “Company”),
entered into a $3.0 million secured revolving line of credit (the “line of credit”) and a $1.5 million term loan (the “term
loan”) with Farmers & Merchants Bank of Central California. The line of credit bears interest at a variable rate per annum
equal to The Wall Street Journal Prime Rate, subject to a floor of 7.5% and ceiling of the maximum rate allowed under applicable law,
payable monthly, and matures September 5, 2024. The term loan is payable in 36 monthly installments of $46,954.68 (including principal
and interest), bears interest at a rate per annum of 7.7%, and matures September 5, 2026. The term loan is subject to a prepayment fee
of 3% of the outstanding principal balance if the term loan is prepaid during the first loan year, decreasing by 1% each year until the
end of the third loan year. Both the line of credit and term loan are subject to customary default and acceleration provisions and to
certain financial covenants, including working capital in excess of $1.25 million, a debt service coverage ratio in excess of 1.25 to
1.00, and a debt / worth ratio not in excess of 3.25 to 1.00 (in each case, calculated as described in the business loan agreement governing
the line of credit or term loan, as applicable). In addition, the Company agreed to guarantee Belami’s obligations under the line
of credit and term loan, pursuant to a commercial guaranty agreement.
The
above descriptions of the line of credit, term loan and guaranty do not purport to be complete and are subject to, and qualified in their
entirety by, the full text of the agreements governing the line of credit, term loan, and guaranty, copies of which are filed as Exhibit
10.1, Exhibit 10.2, and Exhibit 10.3, respectively, to this Current Report on Form 8-K (this “Current
Report”) and are incorporated herein by reference.
Item
2.03 |
Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The
disclosure set forth under Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
Item
9.01 |
Financial
Statements and Exhibits |
Exhibit
Number |
|
Description |
10.1* |
|
Line of Credit Promissory Note, Business Loan Agreement (Asset Based), and Commercial Security Agreement, signed September 18, 2023, by and between Belami, Inc., as borrower and grantor, and Farmers & Merchants Bank of Central California, as lender. |
10.2* |
|
Term Loan Promissory Note and Business Loan Agreement, signed September 18, 2023, by and between Belami, Inc., as borrower, and Farmers & Merchants Bank of Central California, as lender. |
10.3 |
|
Commercial Guaranty, signed September 18, 2023, by and among Belami, Inc., as borrower, SKYX Platforms Corp., as guarantor, and Farmers & Merchants Bank of Central California, as lender. |
104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document). |
*
Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company
agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
SKYX
PLATFORMS CORP. |
|
|
Date:
September 22, 2023 |
By: |
/s/
John P. Campi |
|
Name: |
John
P. Campi |
|
Title: |
Co-Chief
Executive Officer |
Exhibit
10.1
PROMISSORY
NOTE
Principal |
Loan
Date |
Maturity |
Loan
No |
Call
/ Coll |
Account |
Officer |
Initials |
$3,000,000.00 |
08-28-2023 |
09-05-2024 |
31-028381-30 |
|
|
1052 |
|
References
in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any
item above containing “***” has been omitted due to text length limitations. |
Borrower: |
|
BELAMI,
INC.
3321
POWER INN ROAD, SUITE 310
SACRAMENTO,
CA 95826 |
|
Lender: |
|
Farmers
& Merchants Bank of Central California
a
California banking corporation
121
West Pine Street
P.O.
Box 3000
Lodi,
CA 95241
(800)
888-1498 |
Principal
Amount: $3,000,000.00 |
Date
of Note: August 28, 2023 |
PROMISE
TO PAY. BELAMI, INC. (“Borrower”) promises to pay to Farmers & Merchants Bank of Central California (“Lender”),
or order, in lawful money of the United States of America, the principal amount of Three Million & 00/100 Dollars ($3,000,000.00)
or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall
be calculated from the date of each advance until repayment of each advance.
PAYMENT.
Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on September 5, 2024. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning September 5, 2023, with
all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable
law, payments will be applied to the loan as described in the “HOW YOUR PAYMENTS ARE APPLIED” section. Borrower will pay
Lender at Lender’s address shown above or at such other place as Lender may designate in writing.
VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is the Lender’s
Base Rate (the “Index”). Lender’s Base Rate is the “Prime Rate” as defined when first published in The
Wall Street Journal, Western Edition as such “Prime Rate” changes from time to time. If for any reason The Wall Street Journal,
Western Edition is no longer published or ceases or suspends publishing a “Prime Rate”, the Base Rate shall then become the
“Bank Prime Loan” rate as defined and published in the Federal Reserve Statistical Release H.15(519) as such “Bank
Prime Loan” Rate changes from time to time. Lender will tell Borrower the current Index rate upon Borrower’s request. The
interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as
well. The Index currently is 8.500% per annum. Interest on the unpaid principal balance of this Note will be calculated as described
in the “INTEREST CALCULATION METHOD” paragraph using a rate equal to the Index, adjusted if necessary for any minimum and
maximum rate limitations described below, resulting in an initial rate of 8.500%. NOTICE: Under no circumstances will the interest rate
on this Note be less than 7.500% per annum or more than the maximum rate allowed by applicable law.
INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this Note is computed using this method. This calculation method results in a higher effective interest rate
than the numeric interest rate stated in this Note.
PREPAYMENT;
MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of
the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required
by law. In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge
of $100.00. Other than Borrower’s obligation to pay any minimum interest charge, Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or similar
language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower
will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including
any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or
that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Farmers
& Merchants Bank of Central California, a California banking corporation, 121 West Pine Street , P.O. Box 3000, Lodi, CA 95241.
LATE
CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment.
INTEREST
AFTER DEFAULT. Upon maturity of this Note, whether the scheduled maturity date or due to this loan being accelerated by Lender because
of a default under this Note, the interest rate on this Note shall immediately increase by adding an additional 4.000 percentage point
margin (“Default Rate Margin”). The Default Rate Margin shall also apply to each succeeding interest rate change that would
have applied had there been no default. However, in no event will the interest rate applied under this paragraph exceed the maximum interest
rate permitted under applicable law.
PROMISSORY
NOTE |
(Continued) |
Loan
No: 31-028381-30 |
Page
2 |
|
|
DEFAULT.
Each of the following shall constitute an event of default (“Event of Default”) under this Note:
Payment
Default. Borrower fails to make any payment when due under this Note.
Other
Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or
in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default
in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s
property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related
documents.
False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under
this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Insolvency.
The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes
a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.
Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by
this Note.
Change
In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.
Adverse
Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance
of this Note is impaired.
Cure
Provisions. If any default, other than a default in payment, is curable and if Borrower has not been given a notice of a breach of
the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice
to Borrower demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen
(15) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
LENDER’S
RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately
due, and then Borrower will pay that amount.
ATTORNEYS’
FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal
expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other
sums provided by law.
GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of California without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of California.
CHOICE
OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of San Joaquin
County, State of California.
COLLATERAL.
Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein:
(A)
a Commercial Security Agreement dated August 28, 2023 made and executed between BELAMI, INC. and Lender on collateral described as: inventory,
chattel paper, accounts, equipment and general intangibles.
LINE
OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing
by Borrower or as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to be directed to Lender’s office shown above. The following
person or persons are authorized, except as provided in this paragraph, to request advances and authorize payments under the line of
credit until Lender receives from Borrower, at Lender’s address shown above, written notice of revocation of such authority: JIM
BEAUSOLEIL; and PATRICIA BARRON. Minimum advances of $1,000.00 shall be disbursed upon the request of the authorized individuals.
Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited
to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements
on this Note or by Lender’s internal records, including daily computer print-outs. Lender will have no obligation to advance funds
under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor
has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing
business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee
of this Note or any other loan with Lender; or (D) Borrower has applied funds provided pursuant to this Note for purposes other than
those authorized by Lender.
PROMISSORY
NOTE |
(Continued) |
Loan
No: 31-028381-30 |
Page
3 |
|
|
LOAN
AGREEMENT. This Note is subject to a Business Loan Agreement (Asset Based) dated of even date herewith.
FINANCIAL
REPORTING REQUIREMENTS OF BORROWER. In addition to any other reporting requirements stated herein, Borrower agrees to provide tax
returns and financial statements upon Lender’s request.
GUARANTIES.
Prior to disbursement of any loan proceeds, Lender obtained a continuing guaranty from SKYX PLATFORMS CORP., a Florida corporation
dated AUGUST 28, 2023 in the amount of $4,500,000.00.
LEAP
YEAR. In the event of a leap year, the annual interest rate for this Note will be computed on a 366/360 day basis.
PARTNERSHIP
BORROWER. If Borrower is a partnership, each of the general partners of Borrower will be jointly and severally liable with Borrower
for Borrower’s obligations under this Agreement and the Related documents, and Lender may enforce any monetary judgment obtained
in an action related to any thereof directly against the assets of any one or more of Borrower’s general partners without proceeding
against the assets of Borrower or any of Borrower’s other general partners.
PREFERRED
RATE REDUCTION. The interest rate on this Note includes a preferred rate reduction. The interest rate is based on all loan payments
being automatically debited from a checking account you have with Lender as those payments are due. If (1) your checking account is closed
before the loan is paid in full, or (2) there is an insufficient balance in the checking account to cover the automatic debit on the
due date of any payment, or (3) you revoke Lender’s authority to debit the checking account, the interest rate will be subject
to a one time increase of an additional one quarter of one percent (0.25%) for the remainder of the loan. On variable interest rate loans,
the increase will be applied to the spread used in calculating the interest rate. Any minimum interest rate on your loan will also increase
by this percentage. Lender, at its option, immediately or subsequently may do one or more of the following: (A) increase Borrower’s
payments to ensure Borrower’s loan will payoff by its original final maturity date, (B) increase Borrower’s payments to cover
accruing interest, (C) increase the number of Borrower’s payments, and (D) continue Borrower’s payments at the same amount
and increase Borrower’s final payment.
ADDITIONAL
DEFAULT. The following shall constitute a Default under this Note:
Should
Borrower, any guarantor, or any grantor default under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement in favor of Lender or any other creditor or person that may materially affect any of Borrower’s property
or Borrower’s, any guarantor’s, or any grantor’s ability to repay the loans or perform their respective obligations
under this Note or any of the related documents.
COLLECTION
COSTS. Upon default, Lender will have the following rights in addition to any other rights provided in this Note or by law. Lender
may require Borrower to pay, on demand, any of its internal costs or the costs of third parties which Lender reasonably determines were
incurred because of the default. This includes internal costs such as the allocable cost of in-house counsel, staff appraisers, collection
personnel, accounting personnel or other salaried employees, and the overtime or regular-time compensation of Lender’s hourly employees,
that is reasonably incurred as a result of my default. It further includes any fees or costs paid to third parties as a result of or
on account of the default, including fees to appraisers, collection agencies, foreclosure services, title services and other reasonably
incurred amounts. Amounts due under this paragraph shall be due on demand, or Lender may, at its option, add them to the balance of the
Note, in which case they shall bear interest at the Note rate.
HOW
YOUR PAYMENTS ARE APPLIED. Unless otherwise agreed or required by applicable law, payments will be applied first to any interest
due; then to principal; then to all other charges (including but not limited to late charges, attorney fees, appraisal fees, collection
costs, and any other costs or expenses) associated with enforcing this Note.
PAYMENT
UPON DEFAULT. If in default at any time during the loan, the entire balance of the loan, principal and interest, or any portion thereof,
may become due and payable upon demand by Lender, including any costs or expenses associated with enforcing this Note. The Lender reserves
the right to apply payments in any order to the extent not prohibited by applicable law.
ARBITRATION.
Each party to this agreement, on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective
shareholders, directors, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies
between them whether individual, joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract
and tort disputes against any party or any such party’s shareholders, directors, officers, employees, agents, representatives,
successors and assigns, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim
is filed, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement
or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining
order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising
any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act,
or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating
to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain
any act of any party. All parties agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of
the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred
to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement
shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes.
The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such
arbitration shall be conducted at a location determined by the arbitrator in San Joaquin County, California, and administered by the
American Arbitration Association (“AAA”) in accordance with the California Arbitration Act (Title 9, California Code of Civil
Procedure Section 1280 et. seq.) and the then existing Commercial Rules of the AAA.
PROMISSORY
NOTE |
(Continued) |
Loan
No: 31-028381-30 |
Page
4 |
|
|
WAIVER
OF JURY TRIAL. To the extent permitted by applicable law, each party to this agreement, on behalf of themselves and each of their
respective subsidiaries, affiliates, and all of their respective shareholders, directors, officers, employees, agents, representatives,
successors and assigns, hereby irrevocably waives, to the fullest extent permitted by applicable law, any right such party may have to
a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this agreement or any other loan document
or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory), whether by claim or counterclaim,
and whether against any party or any such party’s shareholders, directors, officers, employees, agents, representatives, successors
and assigns. Each party hereto acknowledges that it and the other parties hereto have been induced to enter into this agreement and the
other loan documents by, among other things, the mutual waivers and certifications in this section.
SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors
and assigns, and shall inure to the benefit of Lender and its successors and assigns.
GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without
the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.
PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
BELAMI,
INC.
By: |
/s/
JIM BEAUSOLEIL |
|
|
JIM
BEAUSOLEIL, Chief Financial Officer of BELAMI, INC. |
|
LaserPro,
Ver. 23.2.20.003 Copr. Finastra USA Corporation 1997, 2023. All Rights Reserved. - CA P:WINCFICFILPLD20.FC TR-44286 PR-41 (M)
BUSINESS
LOAN AGREEMENT (ASSET BASED)
Principal |
Loan
Date |
Maturity |
Loan
No |
Call
/ Coll |
Account |
Officer |
Initials |
$3,000,000.00 |
08-28-2023 |
09-05-2024 |
31-028381-30 |
|
|
1052 |
|
References
in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any
item above containing “***” has been omitted due to text length limitations. |
Borrower: |
|
BELAMI,
INC.
3321
POWER INN ROAD, SUITE 310
SACRAMENTO,
CA 95826 |
|
Lender: |
|
Farmers
& Merchants Bank of Central California
a
California banking corporation
121
West Pine Street
P.O.
Box 3000
Lodi,
CA 95241
(800)
888-1498 |
THIS
BUSINESS LOAN AGREEMENT (ASSET BASED) dated August 28, 2023, is made and executed between BELAMI, INC. (“Borrower”) and Farmers
& Merchants Bank of Central California (“Lender”) on the following terms and conditions. Borrower has received prior
commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those
which may be described on any exhibit or schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting,
renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in
this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment
and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.
TERM.
This Agreement shall be effective as of August 28, 2023, and shall continue in full force and effect until such time as all of Borrower’s
Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees
and charges, or until such time as the parties may agree in writing to terminate this Agreement.
LINE
OF CREDIT. Lender agrees to make Advances to Borrower from time to time from the date of this Agreement to the Expiration Date, provided
the aggregate amount of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower
may borrow, partially or wholly prepay, and reborrow under this Agreement as follows:
Conditions
Precedent to Each Advance. Lender’s obligation to make any Advance to or for the account of Borrower under this Agreement is
subject to the following conditions precedent, with all documents, instruments, opinions, reports, and other items required under this
Agreement to be in form and substance satisfactory to Lender:
(1)
Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered
by Borrower to Lender.
(2)
Lender shall have received such opinions of counsel, supplemental opinions, and documents as Lender may request.
(3)
The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be
in full force and effect.
(4)
All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to Lender, and be
in full force and effect.
(5)
Lender, at its option and for its sole benefit, shall have conducted an audit of Borrower’s Accounts, Inventory, books, records,
and operations, and Lender shall be satisfied as to their condition.
(6)
Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due
and payable.
(7)
There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower
shall have delivered to Lender the compliance certificate called for in the paragraph below titled “Compliance Certificate.”
Making
Loan Advances. Advances under this credit facility, as well as directions for payment from Borrower’s accounts, may be requested
orally or in writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance
shall be conclusively deemed to have been made at the request of and for the benefit of Borrower (1) when credited to any deposit account
of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at its option,
may set a cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding Business
Day. Under no circumstances shall Lender be required to make any Advance in an amount less than $1,000.00.
Mandatory
Loan Repayments. If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing
Base, Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the
outstanding principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the
aggregate unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable
fees, costs and charges, if any, not yet paid.
Facility
Charge. Borrower recognizes that Lender has incurred and will continue to incur certain costs and expenses in connection with establishing,
maintaining, servicing, and administering the credit facility. To ensure that Lender is able to recover such costs and expenses, Borrower
agrees that, notwithstanding any other provision of this Agreement, the promissory note for the credit facility, or the Related Documents,
Lender shall be entitled to collect the following facility charge(s), which Borrower hereby promises and agrees to pay: $15.00 with regard
to receivables financing and $10.00 with regard to Inventory financing.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
2 |
|
|
Loan
Account. Lender shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other
debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic statements
of Borrower’s account, which statements shall be considered to be correct and conclusively binding on Borrower unless Borrower
notifies Lender to the contrary within thirty (30) days after Borrower’s receipt of any such statement which Borrower deems to
be incorrect.
COLLATERAL.
To secure payment of the Primary Credit Facility and performance of all other Loans, obligations and duties owed by Borrower to Lender,
Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender’s
Security Interests in the Collateral shall be continuing liens and shall include the proceeds and products of the Collateral, including
without limitation the proceeds of any insurance. With respect to the Collateral, Borrower agrees and represents and warrants to Lender:
Perfection
of Security Interests. Borrower agrees to execute all documents perfecting Lender’s Security Interest and to take whatever
actions are requested by Lender to perfect and continue Lender’s Security Interests in the Collateral. Upon request of Lender,
Borrower will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Borrower will note Lender’s
interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. Contemporaneous with the
execution of this Agreement, Borrower will execute one or more UCC financing statements and any similar statements as may be required
by applicable law, and Lender will file such financing statements and all such similar statements in the appropriate location or locations.
Borrower hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or
to continue any Security Interest. Lender may at any time, and without further authorization from Borrower, file a carbon, photograph,
facsimile, or other reproduction of any financing statement for use as a financing statement. Borrower will reimburse Lender for all
expenses for the perfection, termination, and the continuation of the perfection of Lender’s security interest in the Collateral.
Borrower promptly will notify Lender before any change in Borrower’s name including any change to the assumed business names of
Borrower. Borrower also promptly will notify Lender before any change in Borrower’s Social Security Number or Employer Identification
Number. Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower’s principal
governance office or should Borrower merge or consolidate with any other entity.
Collateral
Records. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records
shall be available to Lender or Lender’s representative upon demand for inspection and copying at any reasonable time. With respect
to the Accounts, Borrower agrees to keep and maintain such records as Lender may require, including without limitation information concerning
Eligible Accounts and Account balances and agings. Records related to Accounts (Receivables) are or will be located at 3321 POWER INN
ROAD, SUITE 206, SACRAMENTO, CA 95826. With respect to the Inventory, Borrower agrees to keep and maintain such records as Lender may
require, including without limitation information concerning Eligible Inventory and records itemizing and describing the kind, type,
quality, and quantity of Inventory, Borrower’s Inventory costs and selling prices, and the daily withdrawals and additions to Inventory.
Records related to Inventory are or will be located at 3321 POWER INN ROAD, SUITE 310, SACRAMENTO, CA 95826. The above is an accurate
and complete list of all locations at which Borrower keeps or maintains business records concerning Borrower’s collateral.
Collateral
Schedules. Concurrently with the execution and delivery of this Agreement, Borrower shall execute and deliver to Lender schedules
of Accounts and Inventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to the Lender.
Thereafter supplemental schedules shall be delivered according to the following schedule: With respect to Eligible Accounts, schedules
shall be delivered MONTHLY TO SUPPORT DRAWS FOR THE ENSUING MONTH. With respect to Eligible Inventory, schedules shall be delivered MONTHLY
TO SUPPORT DRAWS FOR THE ENSUING MONTH.
Representations
and Warranties Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1) Each Account represented
by Borrower to be an Eligible Account for purposes of this Agreement conforms to the requirements of the definition of an Eligible Account;
(2) All Account information listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; and (3)
Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect, examine, and audit Borrower’s
records and to confirm with Account Debtors the accuracy of such Accounts.
Representations
and Warranties Concerning Inventory. With respect to the Inventory, Borrower represents and warrants to Lender: (1) All Inventory
represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of Eligible
Inventory; (2) All Inventory values listed on schedules delivered to Lender will be true and correct, subject to immaterial variance;
(3) The value of the Inventory will be determined on a consistent accounting basis; (4) Except as agreed to the contrary by Lender in
writing, all Eligible Inventory is now and at all times hereafter will be in Borrower’s physical possession and shall not be held
by others on consignment, sale on approval, or sale or return; (5) Except as reflected in the Inventory schedules delivered to Lender,
all Eligible Inventory is now and at all times hereafter will be of good and merchantable quality, free from defects; (6) Eligible Inventory
is not now and will not at any time hereafter be stored with a bailee, warehouseman, or similar party without Lender’s prior written
consent, and, in such event, Borrower will concurrently at the time of bailment cause any such bailee, warehouseman, or similar party
to issue and deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender name evidencing the storage of Inventory;
and (7) Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect and examine the Inventory
and to check and test the same as to quality, quantity, value, and condition.
REPRESENTATIONS
AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement
of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:
Organization.
Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of California. Borrower is duly authorized to transact business in all other states in which
Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower
is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which
the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and
authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower
maintains an office at 3321 POWER INN ROAD, SUITE 310, SACRAMENTO, CA 95826. Unless Borrower has designated otherwise in writing, the
principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral. Borrower
will notify Lender prior to any change in the location of Borrower’s state of organization or any change in Borrower’s name.
Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court
applicable to Borrower and Borrower’s business activities.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
3 |
|
|
Assumed
Business Names. Borrower has filed or recorded all documents or filings required by law relating to all assumed business names used
by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does
business: None.
Authorization.
Borrower’s execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by
all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision
of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower
or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties.
Financial
Information. Each of Borrower’s financial statements supplied to Lender truly and completely disclosed Borrower’s financial
condition as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent
to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed
in such financial statements.
Legal
Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered
will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.
Properties.
Except as contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title
to all of Borrower’s properties free and clear of all Security Interests, and has not executed any security documents or financing
statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has
not used or filed a financing statement under any other name for at least the last five (5) years.
Hazardous
Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period
of Borrower’s ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge
of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any
prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating
to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use,
generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and
any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including
without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections
and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections
or tests made by Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not be construed to create
any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained
herein are based on Borrower’s due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower
hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for
cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach
of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release
of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify
and defend, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall
not be affected by Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.
Litigation
and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition
or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.
Taxes.
To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports that are or were required to be filed,
have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to
be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.
Lien
Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements,
or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing
repayment of Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests
and rights in and to such Collateral.
Binding
Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof,
as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.
AFFIRMATIVE
COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:
Deposit
Accounts. Maintain with Lender compensating balances of available collected funds NET FREE COLLECTED BALANCES IN ALL DEPOSIT ACCOUNTS
HELD BY BORROWER AND ITS RELATED ENTITIES. FOR PURPOSES OF THIS PARAGRAPH “RELATED ENTITIES” MEANS BORROWER AND ANY OPERATION
IN WHICH BORROWER OR ITS PRINCIPALS HAVE A 25% OWNERSHIP OR AS REASONABLY DETERMINED BY LENDER TO BE CONTROLLED BY BORROWER in an amount
not less than 10.000% of the outstanding Loan commitment on all loans from Lender to Borrower.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
4 |
|
|
Notices
of Claims and Litigation. Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition,
and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower
or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial
Records. Maintain its books and records in accordance with GAAP, or an OCBOA acceptable to Lender, applied on a consistent basis,
and permit Lender to examine and audit Borrower’s books and records at all reasonable times.
Financial
Statements. Furnish Lender with the following:
Annual
Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Borrower’s
balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to Lender.
Interim
Statements. As soon as available, but in no event later than forty-five (45) days after the end of each fiscal quarter, Borrower’s
balance sheet and profit and loss statement for the period ended, prepared by Borrower.
Tax
Returns. As soon as available, but in no event later than thirty (30) days after the applicable filing date for the tax reporting
period ended, Borrower’s Federal and other governmental tax returns, prepared by Borrower.
Additional
Requirements.
(a)
A monthly Borrowing Base Certificate, in form and substance acceptable to Lender, reflecting accounts receivable, accounts payable and
inventory make up within 25 days of each month end;
(b)
Monthly reports on: accounts receivable aging, inventory, and accounts payable aging concurrently with the Borrowing Base Certificate
required above;
(c)
An annual audit of inventory, accounts receivable, and accounts payable, conducted in a manner satisfactory to Lender, at Borrower’s
own expense. Such audit is to be prepared by an independent third party acceptable to Lender.
All
financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, or an OCBOA acceptable to Lender,
applied on a consistent basis, and certified by Borrower as being true and correct.
Additional
Information. Furnish such additional information and statements, as Lender may request from time to time.
Financial
Covenants and Ratios. Comply with the following covenants and ratios:
Working
Capital Requirements. Maintain Working Capital in excess of $1,250,000.00. Other Working Capital requirements are as follows:
Annually.
Minimum
Income and Cash flow Requirements. Borrower shall comply with the following cash flow ratio requirements:
DEBT
SERVICE COVERAGE Ratio. Maintain a ratio of DEBT SERVICE COVERAGE in excess of 1.250 to 1.000. This coverage ratio will be
evaluated as of Year-end. For purposes of determining this ratio Lender will use the following formula: Borrower’s Earnings Before
Interest, Taxes, Depreciation and Amortization minus Distributions divided by Borrower’s Principal and Interest.
Tangible
Net Worth Requirements. Borrower shall comply with the following net worth ratio requirements:
Debt
/ Worth Ratio. Maintain a ratio of Debt / Worth not in excess of 3.250 to 1.000. The ratio “Debt / Worth” means
Borrower’s Total Liabilities divided by Borrower’s Tangible Net Worth. This leverage ratio will be evaluated as of year-end.
Except
as provided above, all computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance
with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct.
Insurance.
Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to
Borrower’s properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower,
upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender.
Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by
any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or
is offered a security interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other endorsements
as Lender may require.
Insurance
Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount
of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and
the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more
often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.
Guaranties.
Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor
named below, on Lender’s forms, and in the amount and under the conditions set forth in those guaranties.
Name of Guarantor | |
Amount | |
SKYX PLATFORMS CORP. | |
$ | 4,500,000.00 | |
Other
Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and
any other party and notify Lender immediately in writing of any default in connection with any other such agreements.
Loan
Proceeds. Use all Loan proceeds solely for Borrower’s business operations, unless specifically consented to the contrary by
Lender in writing.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
5 |
|
|
Taxes,
Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments,
taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits,
prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s
properties, income, or profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge,
levy, lien or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower
shall have established on Borrower’s books adequate reserves with respect to such contested assessment, tax, charge, levy, lien,
or claim in accordance with GAAP or an OCBOA acceptable to Lender.
Performance.
Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents,
and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default
in connection with any agreement.
Operations.
Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and
management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs
in a reasonable and prudent manner.
Environmental
Studies. Promptly conduct and complete, at Borrower’s expense, all such investigations, studies, samplings and testings as
may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined
as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting
any property or any facility owned, leased or used by Borrower.
Compliance
with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of the Collateral,
including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation
and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior
to doing so and so long as, in Lender’s sole opinion, Lender’s interests in the Collateral are not jeopardized. Lender may
require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s interest.
Inspection.
Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s
other properties and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s
books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated
records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request
of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies
of any records it may request, all at Borrower’s expense.
Environmental
Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist,
as a result of an intentional or unintentional action or omission on Borrower’s part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity
is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities;
shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien,
citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional
action or omission on Borrower’s part in connection with any environmental activity whether or not there is damage to the environment
and/or other natural resources.
Additional
Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments,
financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
Required
Financial Items. Borrower acknowledges the importance to Lender of the timely delivery of each of the items required by this section
(each, a “Required Financial Item” and collectively, the “Required Financial Items”). In the event
Borrower fails to deliver to Lender any of the Required Financial Items within the time frame specified herein (each such event, a “Reporting
Failure”), in addition to constituting an Event of Default hereunder and without limiting Lender’s other rights and remedies
with respect to the occurrence of such an Event of Default, Borrower shall pay to Lender the sum of $250.00 per occurrence for each Reporting
Failure; provided, however, as it relates solely to the first two (2) Reporting Failures in any calendar year, such occurrence shall
not be deemed an Event of Default unless Borrower fails to provide the Required Financial Items following thirty (30) days notice from
Lender. It shall constitute a further Event of Default hereunder if any such payment is not received by Lender within thirty (30) days
of the date on which such payment is due, and Lender shall be entitled to the exercise of all of its rights and remedies provided hereunder.
Covenant
Violations. Borrower acknowledges that Borrower’s compliance with each of the covenants contained in the Loan Documents is
of material importance to Lender, and failure to satisfy the covenants (financial or otherwise) (each such event, a “Covenant Compliance
Failure”) would result in additional risk and administrative monitoring costs incurred by Lender. Therefore, in addition to constituting
an Event of Default hereunder and without limiting Lender’s other rights and remedies with respect to the occurrence of such an
Event of Default, Borrower shall pay to Lender a fee of no less than $750.00 for each Covenant Compliance Failure. If a covenant is measured
or tested periodically, then failure to satisfy the applicable covenant for each such period shall constitute a separate Covenant Compliance
Failure. It shall constitute a further Event of Default hereunder if any such fee is not received by Lender within thirty (30) days of
the date on which such payment is due, and Lender shall be entitled to the exercise of all of its rights and remedies provided hereunder.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
6 |
|
|
RECOVERY
OF ADDITIONAL COSTS. If the imposition of or any change in any law, rule, regulation, guideline, or generally accepted accounting
principle, or the interpretation or application of any thereof by any court, administrative or governmental authority, or standard-setting
organization (including any request or policy not having the force of law) shall impose, modify or make applicable any taxes (except
federal, state or local income or franchise taxes imposed on Lender), reserve requirements, capital adequacy requirements or other obligations
which would (A) increase the cost to Lender for extending or maintaining the credit facilities to which this Agreement relates, (B) reduce
the amounts payable to Lender under this Agreement or the Related Documents, or (C) reduce the rate of return on Lender’s capital
as a consequence of Lender’s obligations with respect to the credit facilities to which this Agreement relates, then Borrower agrees
to pay Lender such additional amounts as will compensate Lender therefor, within five (5) days after Lender’s written demand for
such payment, which demand shall be accompanied by an explanation of such imposition or charge and a calculation in reasonable detail
of the additional amounts payable by Borrower, which explanation and calculations shall be conclusive in the absence of manifest error.
LENDER’S
EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or
if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s
failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents,
Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not
limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on
any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date
of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable
on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due
during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note’s maturity.
NEGATIVE
COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior
written consent of Lender:
Indebtedness
and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement,
create, incur or assume indebtedness for borrowed money, including finance leases, (2) sell, transfer, mortgage, assign, pledge, lease,
grant a security interest in, or encumber any of Borrower’s assets (except as allowed as Permitted Liens), or (3) sell with recourse
any of Borrower’s accounts receivable, except to Lender.
Continuity
of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2)
cease operations, liquidate, merge or restructure as a legal entity (whether by division or otherwise), consolidate with or acquire any
other entity, change its name, convert to another type of entity or redomesticate, dissolve or transfer or sell Collateral out of the
ordinary course of business, or (3) pay any dividends on Borrower’s stock (other than dividends payable in its stock), provided,
however that notwithstanding the foregoing, but only so long as no Event of Default has occurred and is continuing or would result from
the payment of dividends, if Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as
amended), Borrower may pay cash dividends on its stock to its shareholders from time to time in amounts necessary to enable the shareholders
to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely
from their status as Shareholders of a Subchapter S Corporation because of their ownership of shares of Borrower’s stock, or purchase
or retire any of Borrower’s outstanding shares or alter or amend Borrower’s capital structure.
Loans,
Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase,
create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the
ordinary course of business.
Agreements.
Enter into any agreement containing any provisions which would be violated or breached by the performance of Borrower’s obligations
under this Agreement or in connection herewith.
CESSATION
OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement,
Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under
the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B)
Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (C) there occurs a material adverse change in Borrower’s financial condition, in the financial condition of
any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such Guarantor’s guaranty of the Loan or any other loan with Lender.
DEFAULT.
Each of the following shall constitute an Event of Default under this Agreement:
Payment
Default. Borrower fails to make any payment when due under the Loan.
Other
Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.
Default
in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s
or any Grantor’s property or Borrower’s or any Grantor’s ability to repay the Loans or perform their respective obligations
under this Agreement or any of the Related Documents.
False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under
this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
Insolvency.
The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
7 |
|
|
Defective
Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes
a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.
Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Change
in Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.
Adverse
Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance
of the Loan is impaired.
Right
to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not
been given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case
may be, after Lender sends written notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default
within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps which Lender deems in Lender’s
sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
EFFECT
OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents,
all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate
(including any obligation to make further Loan Advances or disbursements), and, at Lender’s option, all Indebtedness immediately
will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described
in the “Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have
all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited
by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action
to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to declare a default and to exercise its
rights and remedies.
ADDITIONAL
EVENT OF DEFAULT. The following shall constitute an Event of Default under this Agreement:
Should
Borrower, any guarantor, or any grantor default under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement in favor of Lender or any other creditor or person that may materially affect any of Borrower’s property
or Borrower’s, any guarantor’s, or any grantor’s ability to repay the loans or perform their respective obligations
under this Agreement or any of the related documents.
ARBITRATION.
Each party to this agreement, on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective
shareholders, directors, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies
between them whether individual, joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract
and tort disputes against any party or any such party’s shareholders, directors, officers, employees, agents, representatives,
successors and assigns, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim
is filed, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement
or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining
order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising
any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act,
or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating
to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain
any act of any party. All parties agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of
the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred
to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement
shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes.
The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such
arbitration shall be conducted at a location determined by the arbitrator in San Joaquin County, California, and administered by the
American Arbitration Association (“AAA”) in accordance with the California Arbitration Act (Title 9, California Code of Civil
Procedure Section 1280 et. seq.) and the then existing Commercial Rules of the AAA.
WAIVER
OF JURY TRIAL. To the extent permitted by applicable law, each party to this agreement, on behalf of themselves and each of their
respective subsidiaries, affiliates, and all of their respective shareholders, directors, officers, employees, agents, representatives,
successors and assigns, hereby irrevocably waives, to the fullest extent permitted by applicable law, any right such party may have to
a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this agreement or any other loan document
or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory), whether by claim or counterclaim,
and whether against any party or any such party’s shareholders, directors, officers, employees, agents, representatives, successors
and assigns. Each party hereto acknowledges that it and the other parties hereto have been induced to enter into this agreement and the
other loan documents by, among other things, the mutual waivers and certifications in this section.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
8 |
|
|
COLLECTION
COSTS. Upon default, Lender will have the following rights in addition to any other rights provided in this Agreement or by law.
Lender may require Borrower to pay, on demand, any of its internal costs or the costs of third parties which Lender reasonably determines
were incurred because of the default. This includes internal costs such as the allocable cost of in-house counsel, staff appraisers,
collection personnel, accounting personnel or other salaried employees, and the overtime or regular-time compensation of Lender’s
hourly employees, that is reasonably incurred as a result of my default. It further includes any fees or costs paid to third parties
as a result of or on account of the default, including fees to appraisers, collection agencies, foreclosure services, title services
and other reasonably incurred amounts. Amounts due under this paragraph shall be due on demand, or Lender may, at its option, add them
to the balance of the Note, in which case they shall bear interest at the Note rate.
EMAIL
NOTICE. Any reference in this Agreement or any other Related Document to “written notice” shall include notice by email,
where there is reasonable certainty that such email notice originated either from a valid Farmers & Merchants Bank of Central California
email address, or from the email address for you on file (if any) with Lender, as the case may be, and may be relied upon as valid and
authentic written communication in which event the notice shall be deemed received on the date of transmission if made on or before 4:00
p.m. Pacific time on a business day so long as no delivery error message is received by the delivering party, or if transmission is made
after 4:00 p.m. Pacific time, then on the next business day so long as no delivery error message is received by the delivering party,
and a copy of such notice is also delivered in person, by overnight courier, or registered or certified mail through the United States
Postal Service.
MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments.
This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys’
Fees; Expenses. Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’
fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone
else to help enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s
attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also shall pay all court costs and such additional fees as may be directed by the court.
Caption
Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Consent
to Loan Participation. Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation
interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other
matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation
interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of
such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of
such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender
or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce
Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower
further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or
defenses that Borrower may have against Lender.
Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of
the State of California without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
California.
Choice
of Venue. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of San Joaquin
County, State of California.
No
Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise
to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or
of any of Borrower’s or any Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required
under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices.
Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes,
Borrower agrees to keep Lender informed at all times of Borrower’s current address. Unless otherwise provided or required by law,
if there is more than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
9 |
|
|
Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,
that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be
so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Subsidiaries
and Affiliates of Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s
subsidiaries and affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require
Lender to make any Loan or other financial accommodation to any of Borrower’s subsidiaries or affiliates.
Successors
and Assigns. All covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall
bind Borrower’s successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall
not, however, have the right to assign Borrower’s rights under this Agreement or any interest therein, without the prior written
consent of Lender.
Survival
of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all representations,
warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender
under this Agreement or the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such
representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents,
shall be continuing in nature, shall be deemed made and redated by Borrower at the time each Loan Advance is made, and shall remain in
full force and effect until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall be terminated
in the manner provided above, whichever is the last to occur.
Time
is of the Essence. Time is of the essence in the performance of this Agreement.
DEFINITIONS.
The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms
used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms
not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words
and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date of this Agreement:
Account.
The word “Account” means a trade account, account receivable, other receivable, or other right to payment for goods sold
or services rendered owing to Borrower (or to a third party grantor acceptable to Lender).
Account
Debtor. The words “Account Debtor” mean the person or entity obligated upon an Account.
Advance.
The word “Advance” means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf
under the terms and conditions of this Agreement.
Agreement.
The word “Agreement” means this Business Loan Agreement (Asset Based), as this Business Loan Agreement (Asset Based)
may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement (Asset
Based) from time to time.
Borrower.
The word “Borrower” means BELAMI, INC. and includes all co-signers and co-makers signing the Note and all their successors
and assigns.
Borrowing
Base. The words “Borrowing Base” mean, as determined by Lender from time to time, the lesser of (1) $3,000,000.00
or (2) the sum of (a) 80.000% of the aggregate amount of Eligible Accounts (not to exceed in corresponding Loan amount
based on Eligible Accounts $3,000,000.00), plus (b) 50.000% of the aggregate amount of Eligible Inventory (not to
exceed in corresponding Loan amount based on Eligible Inventory $3,000,000.00).
Business
Day. The words “Business Day” mean a day on which commercial banks are open in the State of California.
Collateral.
The word “Collateral” means all property and assets granted as collateral security for a Loan, whether real or personal
property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security
interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage,
chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract,
lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract,
or otherwise. The word Collateral also includes without limitation all collateral described in the Collateral section of this Agreement.
Eligible
Accounts. The words “Eligible Accounts” mean at any time, all of Borrower’s Accounts which contain selling terms
and conditions acceptable to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns,
discounts, credits, and offsets of any nature. Unless otherwise agreed to by Lender in writing, Eligible Accounts do not include:
(1)
Accounts with respect to which the Account Debtor is employee or agent of Borrower.
(2)
Accounts with respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its shareholders, officers, or directors.
(3)
Accounts with respect to which goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the
Account Debtor may be conditional.
(4)
Accounts with respect to which the Account Debtor is not a resident of the United States, except to the extent such Accounts are supported
by insurance, bonds or other assurances satisfactory to Lender.
(5)
Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account
Debtor to Borrower.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
10 |
|
|
(6)
Accounts which are subject to dispute, counterclaim, or setoff.
(7)
Accounts with respect to which the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor.
(8)
Accounts with respect to which Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor
to be unsatisfactory.
(9)
Accounts of any Account Debtor who has filed or has had filed against it a petition in bankruptcy or an application for relief under
any provision of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee, custodian,
or receiver for the assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent
or fails generally to pay its debts (including its payrolls) as such debts become due.
(10)
Accounts with respect to which the Account Debtor is the United States government or any department or agency of the United States.
(11)
Accounts which have not been paid in full within 90 DAYS from the invoice date. The entire balance of any Account of any single
Account Debtor will be ineligible whenever the portion of the Account which has not been paid within 90 DAYS from the invoice
date is in excess of 20.000% of the total amount outstanding on the Account.
(12)
That portion of the Accounts of any single Account Debtor which exceeds 20.000% of all of Borrower’s Accounts.
Eligible
Inventory. The words “Eligible Inventory” mean, at any time, all of Borrower’s Inventory as defined below, except:
(1)
Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties.
(2)
Inventory which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing.
(3)
Work in process.
Environmental
Laws. The words “Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating
to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health
and Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event
of Default. The words “Event of Default” mean any of the events of default set forth in this Agreement in the default
section of this Agreement.
Expiration
Date. The words “Expiration Date” mean the date of termination of Lender’s commitment to lend under this Agreement.
GAAP.
The word “GAAP” means generally accepted accounting principles.
Grantor.
The word “Grantor” means each and all of the persons or entities granting a Security Interest in any Collateral for the
Loan, including without limitation all Borrowers granting such a Security Interest.
Guarantor.
The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan.
Guaranty.
The word “Guaranty” means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part
of the Note.
Hazardous
Substances. The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances”
are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as
defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum
and petroleum by-products or any fraction thereof and asbestos.
Indebtedness.
The word “Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and
interest together with all other indebtedness and costs and expenses for which Borrower is responsible under this Agreement or under
any of the Related Documents.
Inventory.
The word “Inventory” means all of Borrower’s raw materials, work in process, finished goods, merchandise, parts
and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrower
now has or hereafter acquires any right, whether held by Borrower or others, and all documents of title, warehouse receipts, bills of
lading, and all other documents of every type covering all or any part of the foregoing. Inventory includes inventory temporarily out
of Borrower’s custody or possession and all returns on Accounts.
Lender.
The word “Lender” means Farmers & Merchants Bank of Central California, its successors and assigns.
Loan.
The word “Loan” means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described
on any exhibit or schedule attached to this Agreement from time to time.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
11 |
|
|
Note.
The word “Note” means all of the obligations of Borrower in favor of Lender or to its order under all existing promissory
notes and that certain promissory note dated AUGUST 28, 2023 for the original or maximum principal amount of THREE MILLION AND 00/100
DOLLARS ($3,000,000.00) executed by Borrower and payable to Lender; and any renewals, extensions, modifications, amendments, or supplements
thereto, together with further sums as Borrower or any successor in ownership hereafter may borrow from Lender when evidenced by another
note or other instruments, reciting it is so secured, payable to Lender or to its order and made by Borrower or any successor-in-ownership,
and all renewals, extensions, modifications, amendments, or supplements thereof.
OCBOA.
The term “OCBOA” means Other Comprehensive Basis of Accounting, as designated by Lender in writing as an acceptable alternative
to GAAP.
Permitted
Liens. The words “Permitted Liens” mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender;
(2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet
delinquent; (4) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled “Indebtedness and Liens”; (5) liens and security interests which, as of the date of this Agreement,
have been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute
an immaterial and insignificant monetary amount with respect to the net value of Borrower’s assets.
Primary
Credit Facility. The words “Primary Credit Facility” mean the credit facility described in the Line of Credit section
of this Agreement.
Related
Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in connection with the Loan.
Security
Agreement. The words “Security Agreement” mean and include without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating
a Security Interest.
Security
Interest. The words “Security Interest” mean, without limitation, any and all types of collateral security, present and
future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt,
lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever
whether created by law, contract, or otherwise.
Tangible
Net Worth. The words “Tangible Net Worth” mean Borrower’s total assets excluding all intangible assets (i.e., goodwill,
trademarks, patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold improvements)
less total debt.
BUSINESS
LOAN AGREEMENT (ASSET BASED) |
(Continued) |
Loan
No: 31-028381-30 |
Page
12 |
|
|
BORROWER
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS
LOAN AGREEMENT (ASSET BASED) IS DATED AUGUST 28, 2023.
BORROWER: |
|
|
|
BELAMI,
INC. |
|
|
|
By:
|
/s/
JIM BEAUSOLEIL |
|
|
JIM
BEAUSOLEIL, Chief Financial Officer of BELAMI, INC. |
|
|
|
|
LENDER: |
|
|
|
FARMERS
& MERCHANTS BANK OF CENTRAL CALIFORNIA |
|
|
|
By:
|
/s/
RYAN STREETER |
|
|
RYAN
STREETER, First Vice President |
|
LaserPro,
Ver. 23.2.20.003 Copr. Finastra USA Corporation 1997, 2023. All Rights Reserved. - CA P:WINCFICFILPLC40.FC TR-44286 PR-41 (M)
COMMERCIAL
SECURITY AGREEMENT
Principal |
Loan
Date |
Maturity |
Loan
No |
Call
/ Coll |
Account |
Officer |
Initials |
$3,000,000.00 |
08-28-2023 |
09-05-2024 |
31-028381-30 |
|
|
1052 |
|
References
in the boxes above are for Lender”s use only and do not limit the applicability of this document to any particular loan or item.
Any
item above containing “***” has been omitted due to text length limitations. |
Grantor: |
|
BELAMI,
INC.
3321
POWER INN ROAD, SUITE 310
SACRAMENTO,
CA 95826 |
|
Lender: |
|
Farmers
& Merchants Bank of Central California
a
California banking corporation
121
West Pine Street
P.O.
Box 3000
Lodi,
CA 95241
(800)
888-1498 |
THIS
COMMERCIAL SECURITY AGREEMENT dated August 28, 2023, is made and executed between BELAMI, INC. (“Grantor”) and Farmers &
Merchants Bank of Central California (“Lender”).
GRANT
OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness
and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights
which Lender may have by law.
COLLATERAL
DESCRIPTION. The word “Collateral” as used in this Agreement means the following described property, whether now owned
or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security
interest for the payment of the Indebtedness and performance of all other obligations under the Note and this Agreement:
All
Inventory, Chattel Paper, Accounts, Equipment, Deposit Accounts and General Intangibles
In
addition, the word “Collateral” also includes all the following, whether now owned or hereafter acquired, whether now existing
or hereafter arising, and wherever located:
(A)
All accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the collateral described herein,
whether added now or later.
(B)
All products and produce of any of the property described in this Collateral section.
(C)
All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment
or other disposition of any of the property described in this Collateral section.
(D)
All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in
this Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party’s insurer,
whether due to judgment, settlement or other process.
(E)
All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of Grantor’s right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or data on electronic media.
GRANTOR’S
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises to
Lender that:
Perfection
of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender’s security
interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting
the Collateral, and Grantor will note Lender’s interest upon any and all chattel paper and instruments if not delivered to Lender
for possession by Lender. This is a continuing Security Agreement and will continue in effect even though all or any part of the Indebtedness
is paid in full and even though for a period of time Grantor may not be indebted to Lender.
Notices
to Lender. Grantor will promptly notify Lender in writing at Lender’s address shown above (or such other addresses as Lender
may designate from time to time) prior to any (1) change in Grantor’s name; (2) change in Grantor’s assumed business name(s);
(3) change in the management of the Corporation Grantor; (4) change in the authorized signer(s); (5) change in Grantor’s principal
office address; (6) change in Grantor’s state of organization; (7) conversion of Grantor to a new or different type of business
entity; or (8) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender.
No change in Grantor’s name or state of organization will take effect until after Lender has received notice.
No
Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor
is a party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement.
Enforceability
of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform
Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws
and regulations concerning form, content and manner of preparation and execution, and all persons appearing to be obligated on the Collateral
have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. At the time any account becomes
subject to a security interest in favor of Lender, the account shall be a good and valid account representing an undisputed, bona fide
indebtedness incurred by the account debtor, for merchandise held subject to delivery instructions or previously shipped or delivered
pursuant to a contract of sale, or for services previously performed by Grantor with or for the account debtor. So long as this Agreement
remains in effect, Grantor shall not, without Lender’s prior written consent, compromise, settle, adjust, or extend payment under
or with regard to any such Accounts. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall
have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing.
COMMERCIAL
SECURITY AGREEMENT |
(Continued) |
Loan
No: 31-028381-30 |
Page
2 |
|
|
Location
of the Collateral. Except in the ordinary course of Grantor’s business, Grantor agrees to keep the Collateral (or to the extent
the Collateral consists of intangible property such as accounts or general intangibles, the records concerning the Collateral) at Grantor’s
address shown above or at such other locations as are acceptable to Lender. Upon Lender’s request, Grantor will deliver to Lender
in form satisfactory to Lender a schedule of real properties and Collateral locations relating to Grantor’s operations, including
without limitation the following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing;
(3) all storage facilities Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located.
Removal
of the Collateral. Except in the ordinary course of Grantor’s business, including the sales of inventory, Grantor shall not
remove the Collateral from its existing location without Lender’s prior written consent. To the extent that the Collateral consists
of vehicles, or other titled property, Grantor shall not take or permit any action which would require application for certificates of
title for the vehicles outside the State of California, without Lender’s prior written consent. Grantor shall, whenever requested,
advise Lender of the exact location of the Collateral.
Transactions
Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor’s business, or as otherwise
provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor
is not in default under this Agreement, Grantor may sell inventory, but only in the ordinary course of its business and only to buyers
who qualify as a buyer in the ordinary course of business. A sale in the ordinary course of Grantor’s business does not include
a transfer in partial or total satisfaction of a debt or any bulk sale. Grantor shall not pledge, mortgage, encumber or otherwise permit
the Collateral to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in
this Agreement, without the prior written consent of Lender. This includes security interests even if junior in right to the security
interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason)
shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall not constitute
consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender.
Title.
Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens
and encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public
office other than those which reflect the security interest created by this Agreement or to which Lender has specifically consented.
Grantor shall defend Lender’s rights in the Collateral against the claims and demands of all other persons.
Repairs
and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair
and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on,
or services rendered or material furnished in connection with the Collateral so that no lien or encumbrance may ever attach to or be
filed against the Collateral.
Inspection
of Collateral. Lender and Lender’s designated representatives and agents shall have the right at all reasonable times to examine
and inspect the Collateral wherever located.
Taxes,
Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon
this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may
withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest
the obligation to pay and so long as Lender’s interest in the Collateral is not jeopardized in Lender’s sole opinion. If
the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient
corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any
interest, costs, attorneys’ fees or other charges that could accrue as a result of foreclosure or sale of the Collateral. In any
contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral.
Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees
to furnish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and in a timely
manner. Grantor may withhold any such payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender’s interest in the Collateral is not jeopardized.
Compliance
with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all
laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the production
of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Lender’s interest in the Collateral, in Lender’s opinion,
is not jeopardized.
Hazardous
Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains
a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment,
disposal, release or threatened release of any Hazardous Substance. The representations and warranties contained herein are based on
Grantor’s due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby (1) releases and waives any future
claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental
Laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims and losses resulting from a breach of
this provision of this Agreement. This obligation to indemnify and defend shall survive the payment of the Indebtedness and the satisfaction
of this Agreement.
COMMERCIAL
SECURITY AGREEMENT |
(Continued) |
Loan
No: 31-028381-30 |
Page
3 |
|
|
Maintenance
of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability
coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis
reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender,
will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations
that coverages will not be cancelled or diminished without at least ten (10) days’ prior written notice to Lender and not including
any disclaimer of the insurer’s liability for failure to give such a notice. Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person.
In connection with all policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender
with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance
as required under this Agreement, Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including
if Lender so chooses “single interest insurance,” which will cover only Lender’s interest in the Collateral.
Application
of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral, whether or not such casualty
or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If
Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure,
pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or
replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the Indebtedness, and shall pay
the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not
committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness.
Insurance
Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which reserves shall be
created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before
the premium due date, amounts at least equal to the insurance premiums to be paid. If fifteen (15) days before payment is due, the reserve
funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to
be paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor
for payment of the insurance premiums required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor’s
sole responsibility.
Insurance
Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such information
as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy;
(4) the property insured; (5) the then current value on the basis of which insurance has been obtained and the manner of determining
that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than
annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral.
Financing
Statements. Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Lender’s
security interest. At Lender’s request, Grantor additionally agrees to sign all other documents that are necessary to perfect,
protect, and continue Lender’s security interest in the Property. Grantor will pay all filing fees, title transfer fees, and other
fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocably
appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a
financing statement.
GRANTOR’S
RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except as otherwise provided below with respect to accounts, Grantor
may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that Grantor’s right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is required by law to perfect Lender’s security interest
in such Collateral. Until otherwise notified by Lender, Grantor may collect any of the Collateral consisting of accounts. At any time
and even though no Event of Default exists, Lender may exercise its rights to collect the accounts and to notify account debtors to make
payments directly to Lender for application to the Indebtedness. If Lender at any time has possession of any Collateral, whether before
or after an Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral
if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender’s sole discretion, shall deem appropriate
under the circumstances, but failure to honor any request by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to
protect, preserve or maintain any security interest given to secure the Indebtedness.
LENDER’S
EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or
if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor’s
failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement or any Related Documents,
Lender on Grantor’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not
limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on
the Collateral and paying all costs for insuring, maintaining and preserving the Collateral. All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date
of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable
on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due
during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note’s maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be entitled upon the occurrence of any Event of Default.
DEFAULT.
Each of the following shall constitute an Event of Default under this Agreement:
Payment
Default. Grantor fails to make any payment when due under the Indebtedness.
Other
Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Grantor.
Default
in Favor of Third Parties. Any guarantor or Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of any guarantor’s
or Grantor’s property or ability to perform their respective obligations under this Agreement or any of the Related Documents.
COMMERCIAL
SECURITY AGREEMENT |
(Continued) |
Loan
No: 31-028381-30 |
Page
4 |
|
|
False
Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor’s behalf under this
Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Defective
Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason.
Insolvency.
The dissolution or termination of Grantor’s existence as a going business, the insolvency of Grantor, the appointment of a
receiver for any part of Grantor’s property, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor.
Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Grantor or by any governmental agency against any collateral securing the Indebtedness. This
includes a garnishment of any of Grantor’s accounts, including deposit accounts, with Lender. However, this Event of Default shall
not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.
Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or Guarantor dies
or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Adverse
Change. A material adverse change occurs in Grantor’s financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired.
Cure
Provisions. If any default, other than a default in payment, is curable and if Grantor has not been given a notice of a breach of
the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after Lender sends written
notice to Grantor demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
RIGHTS
AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights
of a secured party under the California Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or more
of the following rights and remedies:
Accelerate
Indebtedness. Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay,
immediately due and payable, without notice of any kind to Grantor.
Assemble
Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of
title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to
Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take possession
of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Grantor
agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession.
Sell
the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof
in Lender’s own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral
threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, and other persons
as required by law, reasonable notice of the time and place of any public sale, or the time after which any private sale or any other
disposition of the Collateral is to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters
into and authenticates an agreement waiving that person’s right to notification of sale. The requirements of reasonable notice
shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the
disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling
the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the
Note rate from date of expenditure until repaid.
Appoint
Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with
the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the rents from
the Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve
without bond if permitted by law. Lender’s right to the appointment of a receiver shall exist whether or not the apparent value
of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as
a receiver.
Collect
Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from
the Collateral. Lender may at any time in Lender’s discretion transfer any Collateral into Lender’s own name or that of Lender’s
nominee and receive the payments, rents, income, and revenues therefrom and hold the same as security for the Indebtedness or apply it
to payment of the Indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general
intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt
for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness
or Collateral is then due. For these purposes, Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail
addressed to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders,
documents of title, instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender
may notify account debtors and obligors on any Collateral to make payments directly to Lender.
COMMERCIAL
SECURITY AGREEMENT |
(Continued) |
Loan
No: 31-028381-30 |
Page
5 |
|
|
Obtain
Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency
remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this
Agreement. Grantor shall be liable for a deficiency even if the transaction described in this subsection is a sale of accounts or chattel
paper.
Other
Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial
Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may
have available at law, in equity, or otherwise.
Election
of Remedies. Except as may be prohibited by applicable law, all of Lender’s rights and remedies, whether evidenced by this
Agreement, the Related Documents, or by any other writing, shall be cumulative and may be exercised singularly or concurrently. Election
by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action
to perform an obligation of Grantor under this Agreement, after Grantor’s failure to perform, shall not affect Lender’s right
to declare a default and exercise its remedies.
ARBITRATION.
Each party to this agreement, on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective
shareholders, directors, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies
between them whether individual, joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract
and tort disputes against any party or any such party’s shareholders, directors, officers, employees, agents, representatives,
successors and assigns, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim
is filed, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement
or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining
order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising
any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act,
or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating
to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain
any act of any party. All parties agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of
the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred
to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement
shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes.
The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such
arbitration shall be conducted at a location determined by the arbitrator in San Joaquin County, California, and administered by the
American Arbitration Association (“AAA”) in accordance with the California Arbitration Act (Title 9, California Code of Civil
Procedure Section 1280 et. seq.) and the then existing Commercial Rules of the AAA.
WAIVER
OF JURY TRIAL. To the extent permitted by applicable law, each party to this agreement, on behalf of themselves and each of their
respective subsidiaries, affiliates, and all of their respective shareholders, directors, officers, employees, agents, representatives,
successors and assigns, hereby irrevocably waives, to the fullest extent permitted by applicable law, any right such party may have to
a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this agreement or any other loan document
or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory), whether by claim or counterclaim,
and whether against any party or any such party’s shareholders, directors, officers, employees, agents, representatives, successors
and assigns. Each party hereto acknowledges that it and the other parties hereto have been induced to enter into this agreement and the
other loan documents by, among other things, the mutual waivers and certifications in this section.
PARTNERSHIP
GRANTOR. If Grantor is a partnership, each of the general partners of Grantor will be jointly and severally liable with Grantor for
Grantor’s obligations under this Agreement, and Lender may enforce any monetary judgment obtained in an action related to this
Agreement directly against the assets of any one or more of Grantor’s general partners without proceeding against the assets of
Grantor or of any of Grantor’s other general partners.
MISCELLANEOUS
PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments.
This Agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration or amendment.
Attorneys’
Fees; Expenses. Grantor agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’
fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone
else to help enforce this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s
attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection
services. Grantor also shall pay all court costs and such additional fees as may be directed by the court.
Caption
Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of
the State of California without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of
California.
Choice
of Venue. If there is a lawsuit, Grantor agrees upon Lender’s request to submit to the jurisdiction of the courts of San Joaquin
County, State of California.
Preference
Payments. Any monies Lender pays because of an asserted preference claim in Grantor’s bankruptcy will become a part of the
Indebtedness and, at Lender’s option, shall be payable by Grantor as provided in this Agreement.
COMMERCIAL
SECURITY AGREEMENT |
(Continued) |
Loan
No: 31-028381-30 |
Page
6 |
|
|
No
Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise
to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of
dealing between Lender and Grantor, shall constitute a waiver of any of Lender’s rights or of any of Grantor’s obligations
as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such
consent may be granted or withheld in the sole discretion of Lender.
Notices.
Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier,
or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes,
Grantor agrees to keep Lender informed at all times of Grantor’s current address. Unless otherwise provided or required by law,
if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.
Power
of Attorney. Grantor hereby appoints Lender as Grantor’s irrevocable attorney-in-fact for the purpose of executing any documents
necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other
secured parties. Lender may at any time, and without further authorization from Grantor, file a carbon, photographic or other reproduction
of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for
the perfection and the continuation of the perfection of Lender’s security interest in the Collateral.
Waiver
of Co-Obligor’s Rights. If more than one person is obligated for the Indebtedness, Grantor irrevocably waives, disclaims and
relinquishes all claims against such other person which Grantor has or would otherwise have by virtue of payment of the Indebtedness
or any part thereof, specifically including but not limited to all rights of indemnity, contribution or exoneration.
Severability.
If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,
that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be
so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Successors
and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor’s interest, this Agreement shall be
binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in
a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor’s successors with reference to this Agreement
and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability
under the Indebtedness.
Survival
of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive
the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time
as Grantor’s Indebtedness shall be paid in full.
Time
is of the Essence. Time is of the essence in the performance of this Agreement.
DEFINITIONS.
The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms
used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms
not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code:
Agreement.
The word “Agreement” means this Commercial Security Agreement, as this Commercial Security Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time.
Borrower.
The word “Borrower” means BELAMI, INC. and includes all co-signers and co-makers signing the Note and all their successors
and assigns.
Collateral.
The word “Collateral” means all of Grantor’s right, title and interest in and to all the Collateral as described
in the Collateral Description section of this Agreement.
Environmental
Laws. The words “Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating
to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization
Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health
and Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
Event
of Default. The words “Event of Default” mean any of the events of default set forth in this Agreement in the default
section of this Agreement.
Grantor.
The word “Grantor” means BELAMI, INC..
Guarantor.
The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Indebtedness.
Guaranty.
The word “Guaranty” means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part
of the Note.
Hazardous
Substances. The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly
used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances”
are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as
defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum
and petroleum by-products or any fraction thereof and asbestos.
COMMERCIAL
SECURITY AGREEMENT |
(Continued) |
Loan
No: 31-028381-30 |
Page
7 |
|
|
Indebtedness.
The word “Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and
interest together with all other indebtedness and costs and expenses for which Grantor is responsible under this Agreement or under any
of the Related Documents.
Lender.
The word “Lender” means Farmers & Merchants Bank of Central California, its successors and assigns.
Note.
The word “Note” means all of the obligations of Borrower in favor of Lender or to its order under all existing promissory
notes and that certain promissory note dated AUGUST 28, 2023 for the original or maximum principal amount of THREE MILLION AND 00/100
DOLLARS ($3,000,000.00) executed by Borrower and payable to Lender; and any renewals, extensions, modifications, amendments, or supplements
thereto, together with further sums as Borrower or any successor in ownership hereafter may borrow from Lender when evidenced by another
note or other instruments, reciting it is so secured, payable to Lender or to its order and made by Borrower or any successor-in-ownership,
and all renewals, extensions, modifications, amendments, or supplements thereof.
Property.
The word “Property” means all of Grantor’s right, title and interest in and to all the Property as described in
the “Collateral Description” section of this Agreement.
Related
Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental
agreements, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
GRANTOR
HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AUGUST
28, 2023.
GRANTOR: |
|
|
|
BELAMI,
INC. |
|
|
|
By:
|
/s/
JIM BEAUSOLEIL |
|
|
JIM
BEAUSOLEIL, Chief Financial Officer of BELAMI, INC. |
|
LaserPro,
Ver. 23.2.20.003 Copr. Finastra USA Corporation 1997, 2023. All Rights Reserved. - CA P:WINCFICFILPLE40.FC TR-44286 PR-41 (M)
Exhibit
10.2
PROMISSORY
NOTE
Principal |
Loan
Date |
Maturity |
Loan
No |
Call
/ Coll |
Account |
Officer |
Initials |
$1,500,000.00 |
08-28-2023 |
09-05-2026 |
31-028381-31 |
|
|
1052 |
|
References
in the boxes above are for Lender’s use only and do not limit the applicability of this document
to any particular loan or item.
Any
item above containing “***” has been omitted due to text length limitations. |
Borrower: |
|
BELAMI,
INC.
3321
POWER INN ROAD, SUITE 310
SACRAMENTO,
CA 95826 |
|
Lender: |
|
Farmers
& Merchants Bank of Central California
a
California banking corporation
121
West Pine Street
P.O.
Box 3000
Lodi,
CA 95241
(800)
888-1498 |
Principal
Amount: $1,500,000.00 |
Date
of Note: August 28, 2023 |
PROMISE
TO PAY. BELAMI, INC. (“Borrower”) promises to pay to Farmers & Merchants Bank of Central California (“Lender”),
or order, in lawful money of the United States of America, the principal amount of One Million Five Hundred Thousand & 00/100 Dollars
($1,500,000.00), together with interest on the unpaid principal balance from August 28, 2023, calculated as described in the “INTEREST
CALCULATION METHOD” paragraph using an interest rate of 7.700%, until paid in full. The interest rate may change under the terms
and conditions of the “INTEREST AFTER DEFAULT” section.
PAYMENT.
Borrower will pay this loan in 36 payments of $46,954.68 each payment. Borrower’s first payment is due October 5, 2023, and all
subsequent payments are due on the same day of each month after that. Borrower’s final payment will be due on September 5, 2026,
and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed
or required by applicable law, payments will be applied to the loan as described in the “HOW YOUR PAYMENTS ARE APPLIED” section.
Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing.
INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this Note is computed using this method. This calculation method results in a higher effective interest rate
than the numeric interest rate stated in this Note.
PREPAYMENT
FEE; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date
of the loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required
by law. In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge
of $100.00. Upon prepayment of this Note, Lender is entitled to the following prepayment fee: Three percent (3%) of the outstanding
principal balance if said payment is received during the first loan year, decreasing by one percent (1%) each year until the end of the
third loan year, (“Prepayment Fee”) at which time this Prepayment Fee provision expires. The Prepayment Fee also be due upon
any event where the Note is fully or partially satisfied in any manner, other than by making scheduled payments required hereunder or
otherwise as provided in the loan documents, whether voluntary or involuntary, prior to its maturity date (excluding the receipt of insurance
or condemnation proceeds, or the repayment of principal to term is defined in the Loan Agreement), including, but not limited to, any
payment after default, any payment after the maturity date is accelerated or payment by any sale under court order, trustee’s sale
or deed in lieu thereof, or payment by sale or other method under any bankruptcy or insolvency proceeding. For purposes of determining
which loan year the prepayment is received, Lender will use the anniversary date hereof as the first day of a loan year. For the purposes
of determining the current commitment, Lender will combine the outstanding principal and any unused amounts which remain available to
Borrower. Other than Borrower’s obligation to pay any minimum interest charge and prepayment fee, Borrower may pay all or a
portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal
balance due and may result in Borrower’s making fewer payments. Borrower agrees not to send Lender payments marked “paid
in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept it without losing
any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written
communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes
“payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of
a disputed amount must be mailed or delivered to: Farmers & Merchants Bank of Central California, a California banking corporation,
121 West Pine Street , P.O. Box 3000, Lodi, CA 95241.
LATE
CHARGE. If a payment is 15 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $100.00, whichever
is less.
INTEREST
AFTER DEFAULT. Upon maturity of this Note, whether the scheduled maturity date or due to this loan being accelerated by Lender because
of a default under this Note, the interest rate on this Note shall immediately increase by 4.000 percentage points. However, in no event
will the interest rate applied under this paragraph exceed the maximum interest rate permitted under applicable law.
DEFAULT.
Each of the following shall constitute an event of default (“Event of Default”) under this Note:
Payment
Default. Borrower fails to make any payment when due under this Note.
Other
Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or
in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
Default
in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or
sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s
property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related
documents.
PROMISSORY
NOTE
(Continued) |
Loan
No: 31-028381-31 |
Page
2 |
|
False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under
this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.
Insolvency.
The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of
a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.
Creditor
or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes
a garnishment of any of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender
monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.
Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor
dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by
this Note.
Change
In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.
Adverse
Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance
of this Note is impaired.
Cure
Provisions. If any default, other than a default in payment, is curable and if Borrower has not been given a notice of a breach of
the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice
to Borrower demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen
(15) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
LENDER’S
RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately
due, and then Borrower will pay that amount.
ATTORNEYS’
FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender
that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal
expenses, whether or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), and appeals. Borrower also will pay any court costs, in addition to all other
sums provided by law.
GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of California without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of California.
CHOICE
OF VENUE. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of San Joaquin
County, State of California.
COLLATERAL.
Borrower acknowledges this Note is secured by a Commercial Security Agreement dated August 28, 2023.
LOAN
AGREEMENT. This Note is subject to a Business Loan Agreement (Asset Based) dated AUGUST 28, 2023.
FINANCIAL
REPORTING REQUIREMENTS OF BORROWER. In addition to any other reporting requirements stated herein, Borrower agrees to provide tax
returns and financial statements upon Lender’s request.
GUARANTIES.
Prior to disbursement of any loan proceeds, Lender obtained a continuing guaranty from SKYX PLATFORMS CORP., a Florida corporation
dated AUGUST 28, 2023 in the amount of $4,500,000.00.
LEAP
YEAR. In the event of a leap year, the annual interest rate for this Note will be computed on a 366/360 day basis.
PARTNERSHIP
BORROWER. If Borrower is a partnership, each of the general partners of Borrower will be jointly and severally liable with Borrower
for Borrower’s obligations under this Agreement and the Related documents, and Lender may enforce any monetary judgment obtained
in an action related to any thereof directly against the assets of any one or more of Borrower’s general partners without proceeding
against the assets of Borrower or any of Borrower’s other general partners.
PREFERRED
RATE REDUCTION. The interest rate on this Note includes a preferred rate reduction. The interest rate is based on all loan payments
being automatically debited from a checking account you have with Lender as those payments are due. If (1) your checking account is closed
before the loan is paid in full, or (2) there is an insufficient balance in the checking account to cover the automatic debit on the
due date of any payment, or (3) you revoke Lender’s authority to debit the checking account, the interest rate will be subject
to a one time increase of an additional one quarter of one percent (0.25%) for the remainder of the loan. On variable interest rate loans,
the increase will be applied to the spread used in calculating the interest rate. Any minimum interest rate on your loan will also increase
by this percentage. Lender, at its option, immediately or subsequently may do one or more of the following: (A) increase Borrower’s
payments to ensure Borrower’s loan will payoff by its original final maturity date, (B) increase Borrower’s payments to cover
accruing interest, (C) increase the number of Borrower’s payments, and (D) continue Borrower’s payments at the same amount
and increase Borrower’s final payment.
PROMISSORY
NOTE
(Continued) |
Loan
No: 31-028381-31 |
Page
3 |
|
ADDITIONAL
DEFAULT. The following shall constitute a Default under this Note:
Should
Borrower, any guarantor, or any grantor default under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement in favor of Lender or any other creditor or person that may materially affect any of Borrower’s property
or Borrower’s, any guarantor’s, or any grantor’s ability to repay the loans or perform their respective obligations
under this Note or any of the related documents.
COLLECTION
COSTS. Upon default, Lender will have the following rights in addition to any other rights provided in this Note or by law. Lender
may require Borrower to pay, on demand, any of its internal costs or the costs of third parties which Lender reasonably determines were
incurred because of the default. This includes internal costs such as the allocable cost of in-house counsel, staff appraisers, collection
personnel, accounting personnel or other salaried employees, and the overtime or regular-time compensation of Lender’s hourly employees,
that is reasonably incurred as a result of my default. It further includes any fees or costs paid to third parties as a result of or
on account of the default, including fees to appraisers, collection agencies, foreclosure services, title services and other reasonably
incurred amounts. Amounts due under this paragraph shall be due on demand, or Lender may, at its option, add them to the balance of the
Note, in which case they shall bear interest at the Note rate.
HOW
YOUR PAYMENTS ARE APPLIED. Unless otherwise agreed or required by applicable law, payments will be applied first to any interest
due; then to principal; then to all other charges (including but not limited to late charges, attorney fees, appraisal fees, collection
costs, and any other costs or expenses) associated with enforcing this Note.
PAYMENT
UPON DEFAULT. If in default at any time during the loan, the entire balance of the loan, principal and interest, or any portion thereof,
may become due and payable upon demand by Lender, including any costs or expenses associated with enforcing this Note. The Lender reserves
the right to apply payments in any order to the extent not prohibited by applicable law.
ARBITRATION.
Each party to this agreement, on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective
shareholders, directors, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies
between them whether individual, joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract
and tort disputes against any party or any such party’s shareholders, directors, officers, employees, agents, representatives,
successors and assigns, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim
is filed, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement
or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining
order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising
any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act,
or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating
to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain
any act of any party. All parties agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of
the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred
to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement
shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes.
The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such
arbitration shall be conducted at a location determined by the arbitrator in San Joaquin County, California, and administered by the
American Arbitration Association (“AAA”) in accordance with the California Arbitration Act (Title 9, California Code of Civil
Procedure Section 1280 et. seq.) and the then existing Commercial Rules of the AAA.
WAIVER
OF JURY TRIAL. To the extent permitted by applicable law, each party to this agreement, on behalf of themselves and each of their
respective subsidiaries, affiliates, and all of their respective shareholders, directors, officers, employees, agents, representatives,
successors and assigns, hereby irrevocably waives, to the fullest extent permitted by applicable law, any right such party may have to
a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this agreement or any other loan document
or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory), whether by claim or counterclaim,
and whether against any party or any such party’s shareholders, directors, officers, employees, agents, representatives, successors
and assigns. Each party hereto acknowledges that it and the other parties hereto have been induced to enter into this agreement and the
other loan documents by, among other things, the mutual waivers and certifications in this section.
SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors
and assigns, and shall inure to the benefit of Lender and its successors and assigns.
GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo
enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of
dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without
the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.
PROMISSORY
NOTE
(Continued) |
Loan
No: 31-028381-31 |
Page
4 |
|
PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
BELAMI,
INC.
By: |
/s/ JIM
BEAUSOLEIL |
|
|
JIM
BEAUSOLEIL, Chief Financial Officer of BELAMI, INC. |
|
LaserPro,
Ver. 23.2.20.003 Copr. Finastra USA Corporation 1997, 2023. All Rights Reserved. - CA P:WINCFICFILPLD20.FC TR-44288 PR-41 (M)
BUSINESS LOAN AGREEMENT
Principal |
Loan
Date |
Maturity |
Loan
No |
Call
/ Coll |
Account |
Officer |
Initials |
$1,500,000.00 |
08-28-2023 |
09-05-2026 |
31-028381-31 |
|
|
1052 |
|
References
in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.
Any
item above containing “***” has been omitted due to text length limitations. |
Borrower: |
|
BELAMI,
INC.
3321
POWER INN ROAD, SUITE 310
SACRAMENTO,
CA 95826 |
|
Lender: |
|
Farmers
& Merchants Bank of Central California
a
California banking corporation
121
West Pine Street
P.O.
Box 3000
Lodi,
CA 95241
(800)
888-1498 |
THIS BUSINESS LOAN AGREEMENT dated
August 28, 2023, is made and executed between BELAMI, INC. (“Borrower”) and Farmers & Merchants Bank of Central California
(“Lender”) on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied
to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or
schedule attached to this Agreement. Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is
relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing,
or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and (C) all such Loans
shall be and remain subject to the terms and conditions of this Agreement.
TERM. This Agreement shall be
effective as of August 28, 2023, and shall continue in full force and effect until such time as all of Borrower’s Loans in favor
of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges,
or until such time as the parties may agree in writing to terminate this Agreement.
CONDITIONS PRECEDENT TO EACH ADVANCE.
Lender’s obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment
to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.
Loan Documents. Borrower shall
provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in
the Collateral; (3) financing statements and all other documents perfecting Lender’s Security Interests; (4) evidence of insurance
as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender’s counsel.
Borrower’s Authorization.
Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution
and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions,
authorizations, documents and instruments as Lender or its counsel, may require.
Payment of Fees and Expenses.
Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement
or any Related Document.
Representations and Warranties.
The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered
to Lender under this Agreement are true and correct.
No Event of Default. There shall
not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related
Document.
REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as
of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:
Organization. Borrower is a corporation
for profit which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws
of the State of California. Borrower is duly authorized to transact business in all other states in which Borrower is doing business,
having obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically,
Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would
have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties
and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 3321 POWER
INN ROAD, SUITE 310, SACRAMENTO, CA 95826. Unless Borrower has designated otherwise in writing, the principal office is the office at
which Borrower keeps its books and records including its records concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Borrower’s state of organization or any change in Borrower’s name. Borrower shall do all things
necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations,
rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and
Borrower’s business activities.
Assumed Business Names. Borrower
has filed or recorded all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the
name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.
Authorization. Borrower’s
execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action
by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s
articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law,
governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties.
Financial Information. Each of
Borrower’s financial statements supplied to Lender truly and completely disclosed Borrower’s financial condition as of the
date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent to the date of
the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial
statements.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
2 |
|
Legal Effect. This Agreement constitutes,
and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding
obligations of Borrower enforceable against Borrower in accordance with their respective terms.
Properties. Except as contemplated
by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender,
and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower’s
properties free and clear of all Security Interests, and has not executed any security documents or financing statements relating to
such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used or filed a financing
statement under any other name for at least the last five (5) years.
Hazardous Substances. Except as
disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower’s
ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release
of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason
to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners
or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such
matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such
activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including
without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections
and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections
or tests made by Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not be construed to create
any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained
herein are based on Borrower’s due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower
hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for
cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach
of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release
of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify
and defend, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall
not be affected by Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.
Litigation and Claims. No litigation,
claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened,
and no other event has occurred which may materially adversely affect Borrower’s financial condition or properties, other than
litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing.
Taxes. To the best of Borrower’s
knowledge, all of Borrower’s tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments
and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the
ordinary course of business and for which adequate reserves have been provided.
Lien Priority. Unless otherwise
previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing
or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower’s
Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests and rights in and to such
Collateral.
Binding Effect. This Agreement,
the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower
covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:
Notices of Claims and Litigation.
Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing
and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.
Financial Records. Maintain its
books and records in accordance with GAAP, or an OCBOA acceptable to Lender, applied on a consistent basis, and permit Lender to examine
and audit Borrower’s books and records at all reasonable times.
Financial Statements. Furnish
Lender with the following:
Annual Statements. As soon as
available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal year, Borrower’s balance sheet
and income statement for the year ended, audited by a certified public accountant satisfactory to Lender.
Interim Statements. As soon as
available, but in no event later than forty-five (45) days after the end of each fiscal quarter, Borrower’s balance sheet and profit
and loss statement for the period ended, prepared by Borrower in form satisfactory to Lender.
Tax Returns. As soon as available,
but in no event later than thirty (30) days after the applicable filing date for the tax reporting period ended, Borrower’s Federal
and other governmental tax returns, prepared by a tax professional satisfactory to Lender.
All financial reports required to be
provided under this Agreement shall be prepared in accordance with GAAP, or an OCBOA acceptable to Lender, applied on a consistent basis,
and certified by Borrower as being true and correct.
Additional Information. Furnish
such additional information and statements, as Lender may request from time to time.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
3 |
|
Financial Covenants and Ratios.
Comply with the following covenants and ratios:
Working Capital Requirements.
Maintain Working Capital in excess of $1,250,000.00. Other Working Capital requirements are as follows: Annually.
Minimum Income and Cash flow Requirements.
Borrower shall comply with the following cash flow ratio requirements:
Debt Service Coverage Ratio. Maintain
a ratio of Debt Service Coverage in excess of 1.250 to 1.000. The ratio “Debt Service Coverage” means Borrower’s
Earnings before Interest, Taxes, Depreciation and Amortization less Distributions divided by Borrower’s Current Portion of Long
Term Indebtedness plus Interest. This coverage ratio will be evaluated as of Year-end. The debt service ratio means Borrower’s
Earnings Before Interest, Taxes, Depreciation and Amortization minus Distributions divided by Borrower’s Principal and Interest.
Tangible Net Worth Requirements.
Borrower shall comply with the following net worth ratio requirements:
Debt / Worth Ratio. Maintain a ratio
of Debt / Worth not in excess of 3.250 to 1.000. The ratio “Debt / Worth” means Borrower’s Total Liabilities
divided by Borrower’s Tangible Net Worth. This leverage ratio will be evaluated as of year-end.
Except as provided above, all computations
made to determine compliance with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting
principles, applied on a consistent basis, and certified by Borrower as being true and correct.
Insurance. Maintain fire and other
risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s properties
and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of Lender, will
deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations
that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy
also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or
default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security
interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other endorsements as Lender may require.
Insurance Reports. Furnish to
Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request,
including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining
those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually),
Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost
of any Collateral. The cost of such appraisal shall be paid by Borrower.
Guaranties. Prior to disbursement
of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantor named below, on Lender’s
forms, and in the amount and under the conditions set forth in those guaranties.
Name of Guarantor | |
Amount | |
SKYX PLATFORMS CORP. | |
$ | 4,500,000.00 | |
Other Agreements. Comply with
all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify
Lender immediately in writing of any default in connection with any other such agreements.
Loan Proceeds. Use all Loan
proceeds solely for Borrower’s business operations, unless specifically consented to the contrary by Lender in writing.
Taxes, Charges and Liens. Pay
and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges,
levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties
would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or
profits. Provided however, Borrower will not be required to pay and discharge any such assessment, tax, charge, levy, lien or claim so
long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established
on Borrower’s books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance
with GAAP or an OCBOA acceptable to Lender.
Performance. Perform and comply,
in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other
instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection
with any agreement.
Operations. Maintain executive
and management personnel with substantially the same qualifications and experience as the present executive and management personnel;
provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and
prudent manner.
Environmental Studies. Promptly
conduct and complete, at Borrower’s expense, all such investigations, studies, samplings and testings as may be requested by Lender
or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous
substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility
owned, leased or used by Borrower.
Compliance with Governmental Requirements.
Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the
conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation,
the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long
as, in Lender’s sole opinion, Lender’s interests in the Collateral are not jeopardized. Lender may require Borrower to post
adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s interest.
Inspection. Permit employees
or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s other properties
and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts,
and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records
and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender,
shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any
records it may request, all at Borrower’s expense.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
4 |
|
Compliance Certificates. Unless
waived in writing by Lender, provide Lender at least annually, with a certificate executed by Borrower’s chief financial officer,
or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true
and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists
under this Agreement.
Environmental Compliance and Reports.
Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional
or unintentional action or omission on Borrower’s part or on the part of any third party, on property owned and/or occupied by
Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and
in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish
to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive,
letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission
on Borrower’s part in connection with any environmental activity whether or not there is damage to the environment and/or other
natural resources.
Additional Assurances. Make,
execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements,
instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to
perfect all Security Interests.
Required Financial Items. Borrower
acknowledges the importance to Lender of the timely delivery of each of the items required by this section (each, a “Required
Financial Item” and collectively, the “Required Financial Items”). In the event Borrower fails to deliver
to Lender any of the Required Financial Items within the time frame specified herein (each such event, a “Reporting Failure”),
in addition to constituting an Event of Default hereunder and without limiting Lender’s other rights and remedies with respect
to the occurrence of such an Event of Default, Borrower shall pay to Lender the sum of $250.00 per occurrence for each Reporting Failure;
provided, however, as it relates solely to the first two (2) Reporting Failures in any calendar year, such occurrence shall not be deemed
an Event of Default unless Borrower fails to provide the Required Financial Items following thirty (30) days notice from Lender. It shall
constitute a further Event of Default hereunder if any such payment is not received by Lender within thirty (30) days of the date on
which such payment is due, and Lender shall be entitled to the exercise of all of its rights and remedies provided hereunder.
Covenant Violations. Borrower
acknowledges that Borrower’s compliance with each of the covenants contained in the Loan Documents is of material importance to
Lender, and failure to satisfy the covenants (financial or otherwise) (each such event, a “Covenant Compliance Failure”)
would result in additional risk and administrative monitoring costs incurred by Lender. Therefore, in addition to constituting an Event
of Default hereunder and without limiting Lender’s other rights and remedies with respect to the occurrence of such an Event of
Default, Borrower shall pay to Lender a fee of no less than $750.00 for each Covenant Compliance Failure. If a covenant is measured or
tested periodically, then failure to satisfy the applicable covenant for each such period shall constitute a separate Covenant Compliance
Failure. It shall constitute a further Event of Default hereunder if any such fee is not received by Lender within thirty (30) days of
the date on which such payment is due, and Lender shall be entitled to the exercise of all of its rights and remedies provided hereunder.
LENDER’S EXPENDITURES. If any
action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or if Borrower fails to comply
with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or
pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower’s
behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or
paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying
all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower.
All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to
the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term
of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and
payable at the Note’s maturity.
NEGATIVE COVENANTS. Borrower covenants
and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:
Indebtedness and Liens. (1)
Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur
or assume indebtedness for borrowed money, including finance leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security
interest in, or encumber any of Borrower’s assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower’s
accounts receivable, except to Lender.
Continuity of Operations. (1)
Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate,
merge or restructure as a legal entity (whether by division or otherwise), consolidate with or acquire any other entity, change its name,
convert to another type of entity or redomesticate, dissolve or transfer or sell Collateral out of the ordinary course of business, or
(3) pay any dividends on Borrower’s stock (other than dividends payable in its stock), provided, however that notwithstanding the
foregoing, but only so long as no Event of Default has occurred and is continuing or would result from the payment of dividends, if Borrower
is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends
on its stock to its shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated
income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders of
a Subchapter S Corporation because of their ownership of shares of Borrower’s stock, or purchase or retire any of Borrower’s
outstanding shares or alter or amend Borrower’s capital structure.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
5 |
|
Loans, Acquisitions and Guaranties.
(1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest
in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.
Agreements. Enter into any
agreement containing any provisions which would be violated or breached by the performance of Borrower’s obligations under this
Agreement or in connection herewith.
CESSATION OF ADVANCES. If Lender has
made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation
to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement
or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor
dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C)
there occurs a material adverse change in Borrower’s financial condition, in the financial condition of any Guarantor, or in the
value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s
guaranty of the Loan or any other loan with Lender.
DEFAULT. Each of the following shall
constitute an Event of Default under this Agreement:
Payment Default. Borrower fails
to make any payment when due under the Loan.
Other Defaults. Borrower fails
to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents
or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties.
Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect any of Borrower’s or any Grantor’s property
or Borrower’s or any Grantor’s ability to repay the Loans or perform their respective obligations under this Agreement or
any of the Related Documents.
False Statements. Any warranty,
representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Agreement or the Related
Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
Insolvency. The dissolution
or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Borrower.
Defective Collateralization.
This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to
create a valid and perfected security interest or lien) at any time and for any reason.
Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method,
by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any
of Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good
faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding
and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond
for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or
bond for the dispute.
Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent,
or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.
Change in Ownership. Any change
in ownership of twenty-five percent (25%) or more of the common stock of Borrower.
Adverse Change. A material
adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of the Loan
is impaired.
Right to Cure. If any default,
other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar
default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after Lender sends written
notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default within fifteen (15) days; or
(2) if the cure requires more than fifteen (15) days, immediately initiate steps which Lender deems in Lender’s sole discretion
to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance
as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any
Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations
of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to
make further Loan Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due and payable,
all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the “Insolvency”
subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided
in the Related Documents or available at law, in equity, or otherwise. Except as may be prohibited by applicable law, all of Lender’s
rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall
not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower
or of any Grantor shall not affect Lender’s right to declare a default and to exercise its rights and remedies.
ADDITIONAL EVENT OF DEFAULT. The following
shall constitute an Event of Default under this Agreement:
Should Borrower, any
guarantor, or any grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other
agreement in favor of Lender or any other creditor or person that may materially affect any of Borrower’s property or Borrower’s,
any guarantor’s, or any grantor’s ability to repay the loans or perform their respective obligations under this Agreement
or any of the related documents.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
6 |
|
ARBITRATION. Each party to this agreement,
on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective shareholders, directors, officers,
employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies between them whether individual,
joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract and tort disputes against
any party or any such party’s shareholders, directors, officers, employees, agents, representatives, successors and assigns, shall
be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim is filed, upon request of
either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement or be prohibited by
this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining order; invoking
a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising any rights
relating to personal property, including taking or disposing of such property with or without judicial process pursuant to Article 9
of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act, or exercise
of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain any act of any
party. All parties agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil Procedure Section
726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of the right to arbitrate
and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred to arbitration.
Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement shall preclude
any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel, waiver, laches,
and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any arbitration proceeding,
and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes. The Federal Arbitration
Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such arbitration shall be conducted
at a location determined by the arbitrator in San Joaquin County, California, and administered by the American Arbitration Association
(“AAA”) in accordance with the California Arbitration Act (Title 9, California Code of Civil Procedure Section 1280 et. seq.)
and the then existing Commercial Rules of the AAA.
WAIVER OF JURY TRIAL. To the extent
permitted by applicable law, each party to this agreement, on behalf of themselves and each of their respective subsidiaries, affiliates,
and all of their respective shareholders, directors, officers, employees, agents, representatives, successors and assigns, hereby irrevocably
waives, to the fullest extent permitted by applicable law, any right such party may have to a trial by jury in any legal proceeding directly
or indirectly arising out of or relating to this agreement or any other loan document or the transactions contemplated hereby or thereby
(whether based on contract, tort or any other theory), whether by claim or counterclaim, and whether against any party or any such party’s
shareholders, directors, officers, employees, agents, representatives, successors and assigns. Each party hereto acknowledges that it
and the other parties hereto have been induced to enter into this agreement and the other loan documents by, among other things, the
mutual waivers and certifications in this section.
COLLECTION COSTS. Upon default, Lender
will have the following rights in addition to any other rights provided in this Agreement or by law. Lender may require Borrower to pay,
on demand, any of its internal costs or the costs of third parties which Lender reasonably determines were incurred because of the default.
This includes internal costs such as the allocable cost of in-house counsel, staff appraisers, collection personnel, accounting personnel
or other salaried employees, and the overtime or regular-time compensation of Lender’s hourly employees, that is reasonably incurred
as a result of my default. It further includes any fees or costs paid to third parties as a result of or on account of the default, including
fees to appraisers, collection agencies, foreclosure services, title services and other reasonably incurred amounts. Amounts due under
this paragraph shall be due on demand, or Lender may, at its option, add them to the balance of the Note, in which case they shall bear
interest at the Note rate.
EMAIL NOTICE. Any reference in this
Agreement or any other Related Document to “written notice” shall include notice by email, where there is reasonable certainty
that such email notice originated either from a valid Farmers & Merchants Bank of Central California email address, or from the email
address for you on file (if any) with Lender, as the case may be, and may be relied upon as valid and authentic written communication
in which event the notice shall be deemed received on the date of transmission if made on or before 4:00 p.m. Pacific time on a business
day so long as no delivery error message is received by the delivering party, or if transmission is made after 4:00 p.m. Pacific time,
then on the next business day so long as no delivery error message is received by the delivering party, and a copy of such notice is
also delivered in person, by overnight courier, or registered or certified mail through the United States Postal Service.
MISCELLANEOUS PROVISIONS. The following
miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement,
together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in
this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
Attorneys’ Fees; Expenses.
Borrower agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this
Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s attorneys’
fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings
in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement.
Consent to Loan Participation.
Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation interests in
the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to
any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower or about any other matter
relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally
waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests.
Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests
in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation
interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser
of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation
under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the
purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower
may have against Lender.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
7 |
|
Governing Law. This Agreement will
be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of California
without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of California.
Choice of Venue. If there is
a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of San Joaquin County, State of California.
No Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay
or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict compliance
with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and
Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or of any of Borrower’s
or any Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the
granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent
is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Notices. Any notice required
to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by
telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when
deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near
the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to
the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes, Borrower agrees
to keep Lender informed at all times of Borrower’s current address. Unless otherwise provided or required by law, if there is more
than one Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers.
Severability. If a court of
competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding
shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall
be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision
of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement.
Subsidiaries and Affiliates of
Borrower. To the extent the context of any provisions of this Agreement makes it appropriate, including without limitation any representation,
warranty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s subsidiaries and
affiliates. Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make
any Loan or other financial accommodation to any of Borrower’s subsidiaries or affiliates.
Successors and Assigns. All
covenants and agreements by or on behalf of Borrower contained in this Agreement or any Related Documents shall bind Borrower’s
successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the
right to assign Borrower’s rights under this Agreement or any interest therein, without the prior written consent of Lender.
Survival of Representations and
Warranties. Borrower understands and agrees that in making the Loan, Lender is relying on all representations, warranties, and covenants
made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or
the Related Documents. Borrower further agrees that regardless of any investigation made by Lender, all such representations, warranties
and covenants will survive the making of the Loan and delivery to Lender of the Related Documents, shall be continuing in nature, and
shall remain in full force and effect until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement
shall be terminated in the manner provided above, whichever is the last to occur.
Time is of the Essence. Time
is of the essence in the performance of this Agreement.
DEFINITIONS. The following capitalized
words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references
to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in
this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the
date of this Agreement:
Advance. The word “Advance”
means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf on a line of credit or multiple advance
basis under the terms and conditions of this Agreement.
Agreement. The word “Agreement”
means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits
and schedules attached to this Business Loan Agreement from time to time.
Borrower. The word “Borrower”
means BELAMI, INC. and includes all co-signers and co-makers signing the Note and all their successors and assigns.
Collateral. The word “Collateral”
means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly
or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage,
deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device,
or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.
Environmental Laws. The words
“Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating to the protection
of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of
1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the California Health and
Safety Code, Section 25100, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
8 |
|
Event of Default. The words
“Event of Default” mean any of the events of default set forth in this Agreement in the default section of this Agreement.
GAAP. The word “GAAP”
means generally accepted accounting principles.
Grantor. The word “Grantor”
means each and all of the persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation
all Borrowers granting such a Security Interest.
Guarantor. The word “Guarantor”
means any guarantor, surety, or accommodation party of any or all of the Loan.
Guaranty. The word “Guaranty”
means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note.
Hazardous Substances. The words
“Hazardous Substances” mean materials that, because of their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances” are used in their
very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed
under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos.
Indebtedness. The word “Indebtedness”
means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness
and costs and expenses for which Borrower is responsible under this Agreement or under any of the Related Documents.
Lender. The word “Lender”
means Farmers & Merchants Bank of Central California, its successors and assigns.
Loan. The word “Loan”
means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached
to this Agreement from time to time.
Note. The word “Note”
means all of the obligations of Borrower in favor of Lender or to its order under all existing promissory notes and that certain promissory
note dated AUGUST 28, 2023 for the original or maximum principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00)
executed by Borrower and payable to Lender; and any renewals, extensions, modifications, amendments, or supplements thereto, together
with further sums as Borrower or any successor in ownership hereafter may borrow from Lender when evidenced by another note or other
instruments, reciting it is so secured, payable to Lender or to its order and made by Borrower or any successor-in-ownership, and all
renewals, extensions, modifications, amendments, or supplements thereof.
OCBOA. The term “OCBOA”
means Other Comprehensive Basis of Accounting, as designated by Lender in writing as an acceptable alternative to GAAP.
Permitted Liens. The words
“Permitted Liens” mean (1) liens and security interests securing Indebtedness owed by Borrower to Lender; (2) liens for taxes,
assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen,
or carriers, or other like liens arising in the ordinary course of business and securing obligations which are not yet delinquent; (4)
purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course
of business to secure indebtedness outstanding on the date of this Agreement or permitted to be incurred under the paragraph of this
Agreement titled “Indebtedness and Liens”; (5) liens and security interests which, as of the date of this Agreement, have
been disclosed to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute
an immaterial and insignificant monetary amount with respect to the net value of Borrower’s assets.
Related Documents. The words
“Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties,
security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Loan.
Security Agreement. The words
“Security Agreement” mean and include without limitation any agreements, promises, covenants, arrangements, understandings
or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest.
Security Interest. The words
“Security Interest” mean, without limitation, any and all types of collateral security, present and future, whether in the
form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral
chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract,
lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by law, contract,
or otherwise.
Tangible Net Worth. The words
“Tangible Net Worth” mean Borrower’s total assets excluding all intangible assets (i.e., goodwill, trademarks, patents,
copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold improvements) less total debt.
BUSINESS LOAN AGREEMENT
(Continued) |
Loan No: 31-028381-31 |
Page
9 |
|
BORROWER ACKNOWLEDGES HAVING READ ALL THE
PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED AUGUST 28, 2023.
BORROWER: |
|
|
|
BELAMI,
INC. |
|
|
|
|
By:
|
/s/
JIM BEAUSOLEIL |
|
|
JIM
BEAUSOLEIL, Chief Financial Officer of BELAMI, INC. |
|
|
|
|
LENDER: |
|
|
|
FARMERS & MERCHANTS BANK OF CENTRAL CALIFORNIA |
|
|
|
By:
|
/s/
RYAN STREETER |
|
|
RYAN
STREETER, First Vice President |
|
LaserPro,
Ver. 23.2.20.003 Copr. Finastra USA Corporation 1997, 2023. All Rights Reserved. - CA P:WINCFICFILPLC40.FC TR-44288 PR-41 (M)
Exhibit
10.3
COMMERCIAL
GUARANTY
Borrower: |
|
BELAMI,
INC.
3321
POWER INN ROAD, SUITE 310
SACRAMENTO,
CA 95826 |
|
Lender: |
|
Farmers
& Merchants Bank of Central California
a
California banking corporation
121
West Pine Street
P.O.
Box 3000
Lodi,
CA 95241
(800)
888-1498 |
Guarantor: |
|
SKYX PLATFORMS CORP.
11030 JONES BRIDGE ROAD, SUITE 206
JOHNS CREEK, GA 30022 |
|
CONTINUING
GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full
and punctual payment and satisfaction of Guarantor’s Share of the Indebtedness of Borrower to Lender, and the performance and discharge
of all Borrower’s obligations under the Note and the Related Documents. This is a guaranty of payment and performance and not of collection,
so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender’s remedies against anyone else obligated
to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness.
Guarantor will make any payments to Lender or its order, on demand, in legal tender of the United States of America, in same-day funds,
without set-off or deduction or counterclaim, and will otherwise perform Borrower’s obligations under the Note and Related Documents.
Under this Guaranty, Guarantor’s obligations are continuing.
INDEBTEDNESS.
The word “Indebtedness” as used in this Guaranty means all of the principal amount outstanding from time to time and at
any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law,
attorneys’ fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising
or acquired, that Borrower individually or collectively or interchangeably with others, owes or will owe Lender. “Indebtedness”
includes, without limitation, loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease obligations, liabilities
and obligations under any interest rate protection agreements or foreign currency exchange agreements or commodity price protection agreements,
other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances, loans or transactions
that renew, extend, modify, refinance, consolidate or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily
incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined;
direct or indirect; primary or secondary in nature or arising from a guaranty or surety; secured or unsecured; joint or several or joint
and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others; barred or
unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy,
insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards increased or reinstated.
If
Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender’s rights under all
guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any
such other guaranties. Guarantor’s liability will be Guarantor’s aggregate liability under the terms of this Guaranty and any such other
unterminated guaranties.
GUARANTOR’S
SHARE OF THE INDEBTEDNESS. The words “Guarantor’s Share of the Indebtedness” as used in this Guaranty mean an amount not
to exceed Four Million Five Hundred Thousand & 00/100 Dollars ($4,500,000.00) of all the principal amount, interest thereon to the
extent not prohibited by law, and all collection costs, expenses and attorneys’ fees whether or not there is a lawsuit, and if there
is a lawsuit, any fees and costs for trial and appeals.
Guarantor’s
Share of the Indebtedness will only be reduced by sums actually paid by Guarantor under this Guaranty, but will not be reduced by sums
from any other source including, but not limited to, sums realized from any collateral securing the Indebtedness or this Guaranty, or
payments by anyone other than Guarantor, or reductions by operation of law, judicial order or equitable principles. Lender has the sole
and absolute discretion to determine how sums shall be applied among guaranties of the Indebtedness.
The
above limitation on liability is not a restriction on the amount of the Note of Borrower to Lender either in the aggregate or at any
one time.
CONTINUING
GUARANTY. THIS IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE
AND SATISFACTION OF THE GUARANTOR’S SHARE OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON
A CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR’S OBLIGATIONS AND LIABILITY
UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO
BALANCE FROM TIME TO TIME.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
2 |
|
DURATION
OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice
to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender
of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor’s other obligations under this
Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor’s
written notice of revocation must be mailed to Lender, by certified mail, at Lender’s address listed above or such other place as Lender
may designate in writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender
of Guarantor’s written revocation. For this purpose and without limitation, the term “new Indebtedness” does not include the
Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute,
liquidated, determined or due. For this purpose and without limitation, “new Indebtedness” does not include all or part of
the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a commitment that became binding before revocation;
any renewals, extensions, substitutions, and modifications of the Indebtedness. This Guaranty shall bind Guarantor’s estate as to the
Indebtedness created both before and after Guarantor’s death or incapacity, regardless of Lender’s actual notice of Guarantor’s death.
Subject to the foregoing, Guarantor’s executor or administrator or other legal representative may terminate this Guaranty in the same
manner in which Guarantor might have terminated it and with the same effect. Release of any other guarantor or termination of any other
guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty. A revocation Lender receives from any one
or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. It is anticipated that fluctuations
may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that
reductions in the amount of the Indebtedness, even to zero dollars ($0.00), shall not constitute a termination of this Guaranty. This
Guaranty is binding upon Guarantor and Guarantor’s heirs, successors and assigns so long as any of the Guarantor’s Share of the Indebtedness
remains unpaid and even though the Guarantor’s Share of the Indebtedness may from time to time be zero dollars ($0.00).
GUARANTOR’S
AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before or after any revocation hereof, without notice or demand and
without lessening Guarantor’s liability under this Guaranty, from time to time: (A) prior to revocation as set forth above, to make
one or more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend
additional credit to Borrower; (B) to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the Indebtedness or any part of the Indebtedness, including increases and decreases of the rate of interest
on the Indebtedness; extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for
the payment of this Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to perfect, and release
any such security, with or without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any
one or more of Borrower’s sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) to determine
how, when and what application of payments and credits shall be made on the Indebtedness; (F) to apply such security and direct the order
or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreement
or deed of trust, as Lender in its discretion may determine; (G) to sell, transfer, assign or grant participations in all or any part
of the Indebtedness; and (H) to assign or transfer this Guaranty in whole or in part.
GUARANTOR’S
REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or agreements of any kind
have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is executed at Borrower’s
request and not at the request of Lender; (C) Guarantor has full power, right and authority to enter into this Guaranty; (D) the provisions
of this Guaranty do not conflict with or result in a default under any agreement or other instrument binding upon Guarantor and do not
result in a violation of any law, regulation, court decree or order applicable to Guarantor; (E) Guarantor has not and will not, without
the prior written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise dispose of all or substantially
all of Guarantor’s assets, or any interest therein; (F) upon Lender’s request, Guarantor will provide to Lender financial and credit
information in form acceptable to Lender, and all such financial information which currently has been, and all future financial information
which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor’s financial condition
as of the dates the financial information is provided; (G) no material adverse change has occurred in Guarantor’s financial condition
since the date of the most recent financial statements provided to Lender and no event has occurred which may materially adversely affect
Guarantor’s financial condition; (H) no litigation, claim, investigation, administrative proceeding or similar action (including those
for unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made no representation to Guarantor as to the creditworthiness
of Borrower; and (J) Guarantor has established adequate means of obtaining from Borrower on a continuing basis information regarding
Borrower’s financial condition. Guarantor agrees to keep adequately informed from such means of any facts, events, or circumstances which
might in any way affect Guarantor’s risks under this Guaranty, and Guarantor further agrees that, absent a request for information, Lender
shall have no obligation to disclose to Guarantor any information or documents acquired by Lender in the course of its relationship with
Borrower.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
3 |
|
GUARANTOR’S
FINANCIAL STATEMENTS. Guarantor agrees to furnish Lender with the following:
|
Annual
Statements. As soon as available, but in no event later than one-hundred-twenty (120) days after the end of each fiscal
year, Guarantor’s balance sheet and income statement for the year ended, prepared by Guarantor in form satisfactory to Lender. |
|
|
|
Additional
Requirements. Guarantor acknowledges the importance to Lender of the timely delivery of each of the items required
by this section (each, a “Required Financial Item” and collectively, the “Required Financial Items”).
In the event Guarantor fails to deliver to Lender any of the Required Financial Items within the time frame specified herein
(each such event, a “Reporting Failure”), in addition to constituting an Event of Default, as defined in the Note,
and without limiting Lender’s other rights and remedies with respect to the occurrence of such an Event of Default, Guarantor
shall pay to Lender the sum of $250.00 per occurrence for each Reporting Failure; provided, however, as it relates solely to the
first two (2) Reporting Failures in any calendar year, such occurrence shall not be deemed an Event of Default unless Guarantor fails
to provide the Required Financial Items following thirty (30) days notice from Lender. It shall constitute a further Event
of Default hereunder if any such payment is not received by Lender within thirty (30) days of the date on which such payment is due,
and Lender shall be entitled to the exercise of all of its rights and remedies provided hereunder. |
All
financial reports required to be provided under this Guaranty shall be prepared in accordance with GAAP, or other comprehensive basis
of accounting acceptable to Lender and designated by Lender in writing, applied on a consistent basis, and certified by Guarantor as
being true and correct.
GUARANTOR’S
WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender to (A) make any presentment, protest,
demand, or notice of any kind, including notice of change of any terms of repayment of the Indebtedness, default by Borrower or any other
guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the creation
of new or additional Indebtedness; (B) proceed against any person, including Borrower, before proceeding against Guarantor; (C) proceed
against any collateral for the Indebtedness, including Borrower’s collateral, before proceeding against Guarantor; (D) apply any payments
or proceeds received against the Indebtedness in any order; (E) give notice of the terms, time, and place of any sale of the collateral
pursuant to the Uniform Commercial Code or any other law governing such sale; (F) disclose any information about the Indebtedness, the
Borrower, the collateral, or any other guarantor or surety, or about any action or nonaction of Lender; or (G) pursue any remedy or course
of action in Lender’s power whatsoever.
Guarantor
also waives any and all rights or defenses arising by reason of (H) any disability or other defense of Borrower, any other guarantor
or surety or any other person; (I) the cessation from any cause whatsoever, other than payment in full, of the Indebtedness; (J) the
application of proceeds of the Indebtedness by Borrower for purposes other than the purposes understood and intended by Guarantor and
Lender; (K) any act of omission or commission by Lender which directly or indirectly results in or contributes to the discharge of Borrower
or any other guarantor or surety, or the Indebtedness, or the loss or release of any collateral by operation of law or otherwise; (L)
any statute of limitations in any action under this Guaranty or on the Indebtedness; or (M) any modification or change in terms of the
Indebtedness, whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time payment of
the Indebtedness is due and any change in the interest rate, and including any such modification or change in terms after revocation
of this Guaranty on the Indebtedness incurred prior to such revocation.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
4 |
|
Guarantor
waives all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may
become available to Guarantor by reason of California Civil Code Sections 2787 to 2855, inclusive.
Guarantor
waives all rights and any defenses arising out of an election of remedies by Lender even though that the election of remedies, such as
a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and
reimbursement against Borrower by operation of Section 580d of the California Code of Civil Procedure or otherwise.
Guarantor
waives all rights and defenses that Guarantor may have because Borrower’s obligation is secured by real property. This means among other
things: (N) Lender may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower.
(O) If Lender forecloses on any real property collateral pledged by Borrower: (1) the amount of Borrower’s obligation may be reduced
only by the price for which the collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price.
(2) Lender may collect from Guarantor even if Lender, by foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower. This is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because
Borrower’s obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and defenses
based upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure.
Guarantor
understands and agrees that the foregoing waivers are unconditional and irrevocable waivers of substantive rights and defenses to which
Guarantor might otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those
provided by California laws of suretyship and guaranty, anti-deficiency laws, and the Uniform Commercial Code. Guarantor acknowledges
that Guarantor has provided these waivers of rights and defenses with the intention that they be fully relied upon by Lender. Guarantor
further understands and agrees that this Guaranty is a separate and independent contract between Guarantor and Lender, given for full
and ample consideration, and is enforceable on its own terms. Until all of the Indebtedness is paid in full, Guarantor waives any right
to enforce any remedy Guarantor may have against the Borrower or any other guarantor, surety, or other person, and further, Guarantor
waives any right to participate in any collateral for the Indebtedness now or hereafter held by Lender.
Guarantor’s
Understanding With Respect To Waivers. Guarantor warrants and agrees that each of the waivers set forth above is made with Guarantor’s
full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to
public policy or law. If any such waiver is determined to be contrary to any applicable law or public policy, such waiver shall be effective
only to the extent permitted by law or public policy.
Subordination
of Borrower’s Debts to Guarantor. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior
to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may
now or hereafter have against Borrower. In the event of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy,
by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment
of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor
does hereby assign to Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy
of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations
of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor, from time to time to file financing statements and continuation statements
and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.
Authorization
to Obtain a Consumer Credit Report. By signing this Guaranty, I/We hereby authorize Farmers & Merchants Bank of Central California
to obtain a consumer credit report from any of the consumer reporting agencies to use to determine my eligibility for Farmers & Merchants
Bank of Central California lending purposes. I also authorize Farmers & Merchants Bank of Central California to obtain a consumer
credit report related to all future lending purposes covered by this Guaranty. This authorization will continue for as long as at the
time the document is in effect.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
5 |
|
Miscellaneous
Provisions. The following miscellaneous provisions are a part of this Guaranty:
AMENDMENTS.
This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters
set forth in this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.
ATTORNEYS’
FEES; EXPENSES. Guarantor agrees to pay upon demand all of Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this
Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s attorneys’ fees and
legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Guarantor
also shall pay all court costs and such additional fees as may be directed by the court.
CAPTION
HEADINGS. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions
of this Guaranty.
GOVERNING
LAW. This Guaranty will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of
the State of California without regard to its conflicts of law provisions.
CHOICE
OF VENUE. If there is a lawsuit, Guarantor agrees upon Lender’s request to submit to the jurisdiction of the courts of San Joaquin
County, State of California.
INTEGRATION.
Guarantor further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the opportunity
to be advised by Guarantor’s attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor’s intentions and parol evidence
is not required to interpret the terms of this Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all losses, claims,
damages, and costs (including Lender’s attorneys’ fees) suffered or incurred by Lender as a result of any breach by Guarantor of the
warranties, representations and agreements of this paragraph.
INTERPRETATION.
In all cases where there is more than one Borrower or Guarantor, then all words used in this Guaranty in the singular shall be deemed
to have been used in the plural where the context and construction so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the words “Borrower” and “Guarantor” respectively
shall mean all and any one or more of them. The words “Guarantor,” “Borrower,” and “Lender” include the
heirs, successors, assigns, and transferees of each of them. If a court finds that any provision of this Guaranty is not valid or should
not be enforced, that fact by itself will not mean that the rest of this Guaranty will not be valid or enforced. Therefore, a court will
enforce the rest of the provisions of this Guaranty even if a provision of this Guaranty may be found to be invalid or unenforceable.
If any one or more of Borrower or Guarantor are corporations, partnerships, limited liability companies, or similar entities, it is not
necessary for Lender to inquire into the powers of Borrower or Guarantor or of the officers, directors, partners, managers, or other
agents acting or purporting to act on their behalf, and any indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
6 |
|
NOTICES.
Any notice required to be given under this Guaranty shall be given in writing, and, except for revocation notices by Guarantor, shall
be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with
a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered
mail postage prepaid, directed to the addresses shown near the beginning of this Guaranty. All revocation notices by Guarantor shall
be in writing and shall be effective upon delivery to Lender as provided in the section of this Guaranty entitled “DURATION OF GUARANTY.”
Any party may change its address for notices under this Guaranty by giving formal written notice to the other parties, specifying that
the purpose of the notice is to change the party’s address. For notice purposes, Guarantor agrees to keep Lender informed at all times
of Guarantor’s current address. Unless otherwise provided or required by law, if there is more than one Guarantor, any notice given by
Lender to any Guarantor is deemed to be notice given to all Guarantors.
NO
WAIVER BY LENDER. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing
and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s right otherwise
to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of
dealing between Lender and Guarantor, shall constitute a waiver of any of Lender’s rights or of any of Guarantor’s obligations as to
any future transactions. Whenever the consent of Lender is required under this Guaranty, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent
may be granted or withheld in the sole discretion of Lender.
SUCCESSORS
AND ASSIGNS. Subject to any limitations stated in this Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding
upon and inure to the benefit of the parties, their successors and assigns.
PARTNERSHIP
GUARANTOR. If Guarantor is a partnership, each of the general partners of Guarantor will be jointly and severally liable with Guarantor
for Guarantor’s obligations under this Guaranty, and Lender may enforce any monetary judgment obtained in an action related to this Guaranty
directly against the assets of any one or more of Guarantor’s general partners without proceeding against the assets of Guarantor or
any of Guarantor’s other general partners.
ARBITRATION.
Each party to this agreement, on behalf of themselves and each of their respective subsidiaries, affiliates, and all of their respective
shareholders, directors, officers, employees, agents, representatives, successors and assigns, agree that all disputes, claims and controversies
between them whether individual, joint, or class in nature, arising from this Agreement or otherwise, including without limitation contract
and tort disputes against any party or any such party’s shareholders, directors, officers, employees, agents, representatives,
successors and assigns, shall be arbitrated pursuant to the Rules of the American Arbitration Association in effect at the time the claim
is filed, upon request of either party. No act to take or dispose of any Collateral shall constitute a waiver of this arbitration agreement
or be prohibited by this arbitration agreement. This includes, without limitation, obtaining injunctive relief or a temporary restraining
order; invoking a power of sale under any deed of trust or mortgage; obtaining a writ of attachment or imposition of a receiver; or exercising
any rights relating to personal property, including taking or disposing of such property with or without judicial process pursuant to
Article 9 of the Uniform Commercial Code. Any disputes, claims, or controversies concerning the lawfulness or reasonableness of any act,
or exercise of any right, concerning any Collateral, including any claim to rescind, reform, or otherwise modify any agreement relating
to the Collateral, shall also be arbitrated, provided however that no arbitrator shall have the right or the power to enjoin or restrain
any act of any party. All parties agree that in the event of an action for judicial foreclosure pursuant to California Code of Civil
Procedure Section 726, or any similar provision in any other state, the commencement of such an action will not constitute a waiver of
the right to arbitrate and the court shall refer to arbitration as much of such action, including counterclaims, as lawfully may be referred
to arbitration. Judgment upon any award rendered by any arbitrator may be entered in any court having jurisdiction. Nothing in this Agreement
shall preclude any party from seeking equitable relief from a court of competent jurisdiction. The statute of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding shall be deemed the commencement of an action for these purposes.
The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision. Any such
arbitration shall be conducted at a location determined by the arbitrator in San Joaquin County, California, and administered by the
American Arbitration Association (“AAA”) in accordance with the California Arbitration Act (Title 9, California Code of Civil
Procedure Section 1280 et. seq.) and the then existing Commercial Rules of the AAA.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
7 |
|
WAIVER
OF JURY TRIAL. To the extent permitted by applicable law, each party to this agreement, on behalf of themselves and each of their
respective subsidiaries, affiliates, and all of their respective shareholders, directors, officers, employees, agents, representatives,
successors and assigns, hereby irrevocably waives, to the fullest extent permitted by applicable law, any right such party may have to
a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this agreement or any other loan document
or the transactions contemplated hereby or thereby (whether based on contract, tort or any other theory), whether by claim or counterclaim,
and whether against any party or any such party’s shareholders, directors, officers, employees, agents, representatives, successors
and assigns. Each party hereto acknowledges that it and the other parties hereto have been induced to enter into this agreement and the
other loan documents by, among other things, the mutual waivers and certifications in this section.
Definitions.
The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms
used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms
not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code:
BORROWER.
The word “Borrower” means BELAMI, INC. and includes all co-signers and co-makers signing the Note and all their successors
and assigns.
GAAP.
The word “GAAP” means generally accepted accounting principles.
GUARANTOR.
The word “Guarantor” means everyone signing this Guaranty, including without limitation SKYX PLATFORMS CORP., and in each
case, any signer’s successors and assigns.
GUARANTOR’S
SHARE OF THE INDEBTEDNESS. The words “Guarantor’s Share of the Indebtedness” mean Guarantor’s indebtedness to Lender as
more particularly described in this Guaranty.
GUARANTY.
The word “Guaranty” means this guaranty from Guarantor to Lender.
INDEBTEDNESS.
The word “Indebtedness” means Borrower’s indebtedness to Lender as more particularly described in this Guaranty.
LENDER.
The word “Lender” means Farmers & Merchants Bank of Central California, its successors and assigns.
NOTE.
The word “Note” means all of the obligations of Borrower in favor of Lender or to its order under all existing promissory
notes and that certain promissory note dated AUGUST 28, 2023 for the original or maximum principal amount of THREE MILLION AND 00/100
DOLLARS ($3,000,000.00) executed by Borrower and payable to Lender; and any renewals, extensions, modifications, amendments, or supplements
thereto, together with further sums as Borrower or any successor in ownership hereafter may borrow from Lender when evidenced by another
note or other instruments, reciting it is so secured, payable to Lender or to its order and made by Borrower or any successor-in-ownership,
and all renewals, extensions, modifications, amendments, or supplements thereof.
RELATED
DOCUMENTS. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements
and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
COMMERCIAL
GUARANTY
(Continued) |
Loan
No: 31-028381-30 |
Page
8 |
|
EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY
WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”. NO FORMAL ACCEPTANCE BY
LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED AUGUST 28, 2023.
GUARANTOR: |
|
|
|
|
SKYX PLATFORMS CORP. |
|
|
|
|
By: |
/s/ PATRICIA
BARRON |
|
|
PATRICIA
BARRON, Chief Operations Officer
of
SKYX PLATFORMS CORP. |
|
LaserPro,
Ver. 23.2.20.003 Copr. Finastra USA Corporation 1997, 2023. All Rights Reserved. - CA P:WINCFICFILPLE20.FC TR-44286 PR-41 (M)
v3.23.3
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTitle of a 12(b) registered security.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b
+ Details
Name: |
dei_Security12bTitle |
Namespace Prefix: |
dei_ |
Data Type: |
dei:securityTitleItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the Exchange on which a security is registered.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection d1-1
+ Details
Name: |
dei_SecurityExchangeName |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarExchangeCodeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
+ References
+ Details
Name: |
dei_TradingSymbol |
Namespace Prefix: |
dei_ |
Data Type: |
dei:tradingSymbolItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
SKYX Platforms (NASDAQ:SKYX)
Historical Stock Chart
From May 2024 to Jun 2024
SKYX Platforms (NASDAQ:SKYX)
Historical Stock Chart
From Jun 2023 to Jun 2024